Retail
Bargain hunters are driving up the prices
Shoppers looking for a bargain are pushing up the prices for everybody, new research has found. When buyers start bartering to get money off cars,
jewellery or package holidays firms then anticipate this and push prices higher – so factoring in any bargains that may be struck. These are the main conclusions of new research by
John Thanassoulis, of Warwick Business School, and David Gill, of the University of Oxford, published in the Economic Journal. Their study has revealed that bargaining is common
for many goods, and although it allows a consumer to get money off the list price, in anticipation of bargaining, competing firms will alter their pricing.
‘Although bargaining may be great for the individual who does it, it is bad for society as a whole’
Professors Thanassoulis and Gill built a mathematical model of such bargaining markets to analyse the change in prices, profits and consumer welfare when the propensity to bargain among consumers changes. The list price a firm sets forms the price competition
for consumers who bargain with competing firms. If the list price rises, then the competing firms, anticipating an easier sale to comsumers who are comparing bargained to non-bargained prices, will raise their bargained price.
When a bargain is not a bargain: Prof John Thanassoulis
In turn, slightly higher bargained prices cause all bargained prices to rise as competition is relaxed. Professor Thanassoulis said: “Although bargaining may
be great for the individual who does it, it is bad for society as a whole when elevated to a market practice. “The price levels rise for those stuck with list prices;
and they also rise for all bargainers. Furthermore, consumers’ overall benefits are pulled down by bargaining as they are in effect bribed by reductions off an elevated list price into buying a product that is not their best match.”
Central Brands Launch into retail
Central Brands a family run Birmingham based company have launched one of their key product lines Quivers test tube shots into a retail friendly pack.
The company is a family run business and has been around the alcohol industry for over 14 years primarily in nightclubs and bars and work with various big high street names you would be familiar with Walkabout, Reflex, Popworld and Yates to name a few.
The Quivers brand is sold in venues up and down the UK and sell over a million tubes a year with a steady year on year growth.
(Ralph Coombs - Director) we decided to take the move to grow one of our key brands in off trade retail as it’s a product that is unique and stands out from the usual bottles many people see on shelves and will appeal to a wide audience.
Since launch of the new pack Central Brands are already in talks with some major high street retailers and have had some interest from overseas clients as well so the future is looking fantastic for this family run Birmingham company with more products planned for 2017 and beyond.
For more info head over to the website:
www.thequivers.com or email us at:
hello@centralbrands.co.uk
Sector Focus
Fracino scoops up lifetime award
Birmingham-based coffee-machine maker Fracino has won a lifetime honour, the Café Society award. This award recognises the
contribution that the third generation family business to the development, growth and prosperity of the cafe industry. The judges were also impressed
by the 53-year-old family business’ spectacular growth, from being launched in founder Frank Maxwell’s garden shed to an operation that is the UK’s sole manufacturer of cappuccino and espresso machines, a market traditionally dominated by Italian and Spanish manufacturers. Managing director Adrian
Maxwell said: “This award is extremely special, because it is based on the nominations of people and companies in the industry we are proud to support with our innovation and world class manufacturing standards.” Fracino is the only British
manufacturer commissioned by the Subway sandwich shop to produce bespoke machines. The company exports to more
than 70 countries worldwide, and has invested £4m into new equipment and premises.
November 2016 CHAMBERLINK 49
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