PRICE WAR

News

Sally Bengtsson / 2009-06-21 10:46:06

Price war!

Bargains, bargains, bargains! Everywhere you look there are offers, discounts and bargains to be had, whether you are shopping for a bikini or a baguette, a car or a campsite. Prices have been slashed in a bid to encourage consumers to part with their money. However, Jose Average has started saving, more than ever before in Spain, perhaps as a safeguard in case the economic crisis refuses to recover, or perhaps for that rainy day, or perhaps because he has finally come to the conclusion that material goods are not the be all or end all of happiness.

The official date for sales in Spain is July 1st, when shops look likely to reduce prices even more to well below 50% to try and get rid of their summer stock. It’s illegal to display the word “rebajas” before this date, but promotions, reductions and special offers abound at the moment. Designer dresses in Looking Good are being offered at 49 euros, La Ponderosa has 10% off a different range each week. House prices are down to half the original asking prices throughout Spain, cars are being advertised with discounts of 20, 30 or even 40%. Holidays are there for the taking, a trip to Asia can be yours for just 600 euros, and five star hotels are being offered at 40 euros a night, midweek. Restaurants are offering two meals for the price of one, or menu of the day for as little as 5 euros.

Despite all this, the majority of consumers are spending less and less. They are remaining resolute and holding on to their cash, to the dismay of sellers. The purchase of anything that is not essential is being put onto the back burner. People are waiting longer to buy a new car, and last year’s swimsuit might just see through another summer. People are still going away on holiday however, but instead of the usual one month at the beach, the holiday is shortened by a week or two. Supermarkets’ own brands are doing a roaring trade, and international brands are left having to entice buyers with a free gift or some other form of offer.

Prices went down an average of 0.9% in May, the drop especially noticeable in petrol and diesel, computers, cameras, phones, clothing, bread and oil. DVDs can be rented for as little as 1 euro for 24 hours and cinemas are offering free popcorn and a drink to attract punters in. Most businesses have the same overheads as last year, and the only way to raise enough funds to meet these expenses and the staff’s monthly wages is by reducing costs and trying to increase sales. Phone companies are battling to entice competitor’s clients to swap over, offering top of the range mobiles or cheap ADSL on the proviso that you stay with them for a minimum of 24 months.

One drawback of these massive sales is that when consumers can buy something this year for 50 euros, which cost 100 euros last year, they begin to feel that they paid over the odds in the first place, resulting in mistrust of certain brands, especially designer wear.

Perhaps this crisis is making everybody think a little more about whether we really need all those “must have” things that we accumulate. Many people are discovering activities which are free, such as a walk along the beach or relaxing in their garden instead of at the local bar. Recycling is becoming more popular, and second hand shops are gradually making an appearance in Spain. Perhaps this was the wake up call that the whole world needed. Lets hope that now things are slowly starting to pick up, we continue to enjoy all these forgotten activities, that prices stay low, and that we realise that consuming is not the most exciting thing in life.

Tags: Crisis, Unemployment, Tourism, Business