This subject is so pertinent to me as both a Mum and in Business that I felt driven to post an article online to see what other people's thoughts are.
Over the past 12 months, I have seen the costs of our imports escalating.
There have been labour and material shortages in the Far East.
Demand from the West has suddenly been switched back on after the recession as companies seek to re-fill their supply chains, which they were forced to deplete in hard times.
This has led to significant increases in buying prices from our factories.
Alongside this, we have seen shipping costs almost double over the same time period.
Shipping lines depleted their fleets during the recession as many were in a loss making situation.
The reduction in availability, coinciding with the step up in demand allowed shipping lines to inflate their prices dramatically.
The result: higher costs of goods here in the UK.
The third factor in the Great Cost Increase has been the weakness of the Pound on International currency markets.
At its peak 2yrs ago, we enjoyed an exchange rate of 2.
20US Dollars to 1.
00 UK Pound.
At one point this year, we were only able to buy 1.
34US Dollars with the same 1.
As we pay the Chinese in US Dollars, this again has exacerbated cost increases.
Where then have all of these higher costs disappeared to? As yet, I have not seen great increases in the prices of things I buy in the shops.
Have manufacturers in the UK all decided to sit on these cost increases? It has been such a tough trading time, that I think this is a distinct possibility.
Competition is so fierce and consumers so price savvy that I think we have all been frightened to react.
We ourselves have only just decided increase some of our prices from next month.
Are we in for a huge rise in our household costs in the next few months? Then in January, there is the VAT increase, which will add another 2.
1% to pretty much everything we buy.
I hear warnings today, just as it has been stabilising, of another drop in the value of the Pound before Christmas, due to more quantitative easing.
Meanwhile, I received a letter from a customer a couple of weeks ago looking for price reductions for 2011.
Where are these supposed to be coming from? Like all best shoppers, we're now embarking on a great resourcing exercise within our business to trim out any fat that we can, that has crept into our supplier base.
As the general public, I think we're in for a bumpy year again next year and I'm going to have to shop around for Christmas to keep costs down and make all those big purchases sooner rather than later.
Over the past 12 months, I have seen the costs of our imports escalating.
There have been labour and material shortages in the Far East.
Demand from the West has suddenly been switched back on after the recession as companies seek to re-fill their supply chains, which they were forced to deplete in hard times.
This has led to significant increases in buying prices from our factories.
Alongside this, we have seen shipping costs almost double over the same time period.
Shipping lines depleted their fleets during the recession as many were in a loss making situation.
The reduction in availability, coinciding with the step up in demand allowed shipping lines to inflate their prices dramatically.
The result: higher costs of goods here in the UK.
The third factor in the Great Cost Increase has been the weakness of the Pound on International currency markets.
At its peak 2yrs ago, we enjoyed an exchange rate of 2.
20US Dollars to 1.
00 UK Pound.
At one point this year, we were only able to buy 1.
34US Dollars with the same 1.
As we pay the Chinese in US Dollars, this again has exacerbated cost increases.
Where then have all of these higher costs disappeared to? As yet, I have not seen great increases in the prices of things I buy in the shops.
Have manufacturers in the UK all decided to sit on these cost increases? It has been such a tough trading time, that I think this is a distinct possibility.
Competition is so fierce and consumers so price savvy that I think we have all been frightened to react.
We ourselves have only just decided increase some of our prices from next month.
Are we in for a huge rise in our household costs in the next few months? Then in January, there is the VAT increase, which will add another 2.
1% to pretty much everything we buy.
I hear warnings today, just as it has been stabilising, of another drop in the value of the Pound before Christmas, due to more quantitative easing.
Meanwhile, I received a letter from a customer a couple of weeks ago looking for price reductions for 2011.
Where are these supposed to be coming from? Like all best shoppers, we're now embarking on a great resourcing exercise within our business to trim out any fat that we can, that has crept into our supplier base.
As the general public, I think we're in for a bumpy year again next year and I'm going to have to shop around for Christmas to keep costs down and make all those big purchases sooner rather than later.
Source...