Thursday 21 July 2011

Price Gouging 2

We wrote recently about customers perceptions of what is a fair mark-up and how retailers had forced customers online where margins were more acceptable.
A letter in Inside Retailing this week has attempted to examine the issue with this analysis – Shopping centre rents in Australia are astronomical and retailers are forced to look for high margin goods to pay them. High margins usually don’t translate into value for customers and worse still, retailers head into junk territory as they chase the next high margin product. Add the new found power of consumers to check price competition around the globe, and you have a recipe for deep mistrust and dissatisfaction by Australian consumers. You also create a void that international retailers are very happy to move into.
Yet even the new glamorous new international players are prepared to price-gouge the Australian consumer if given the chance. A price tag on a Zara clothing item failed to cover up the original Euro 19 (about A$25-) price. The Australian store price was $49.00. That’s a lot to pay for freight especially when it is a good chance the item came direct from China.
This is just one more area that Queen Victoria Market Traders need to address as we focus on providing our customers with service, value and a satisfying shopping experience