The brightest economic outlook in years

If you have picked up a newspaper, or switched on the television recently then doubtless to say you will know that we experiencing an ‘economic disaster’ (their words not mine). But are things really that bad?

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A new low for Mean Street

Whilst share prices on Wall Street may not yet have found their floor, surely the big investment banks moral standards can’t sink any lower than Goldman Sachs paying $2.6bn in bonuses in a year when their profits are down more than 80%, their share price has plummeted by two thirds, they sought emergency funding from the US Government and dispatched 10% of their global work force to the unemployment queue.

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January Sales start early!

If you have been anywhere near the shops this weekend you can’t fail to have noticed all the signs in the shops advertising price cuts of up to 50%. Whilst the media are busy writing hundreds of stories claiming this is due to the ‘credit crisis’, that’s not entirely true as this type of promotional sales have become quite common over the last couple of years.

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You can’t get better than a Kwik-Fit fitter

For years Kwik-fit advertised with the slogan “you can’t get better than a Kwik-Fit fitter” but they should probably add “unless you buy from us online!” to their jingle. On Monday I got a quote of £90 from my local Kwik-fit for two new tyres for my car but decided not to buy there and then as they had no special offers available and I often see them advertising deals in the paper.

So today I thought I would search around online and see if I could find any special deals and started with the Kwik-fit website which let me buy the same tyres for £70.48. No coupons or discount codes required, just £19.52 cheaper because I have paid for the tyres online rather than from the garage, it will even be the same mechanics that fit the tyres when I take my car in.

Crazy, but hey I am not going to argue!

‘Biggest ever sale’ at Woolies (and probably it’s last)

This weekend Woolworths held it’s biggest ever sale, prompted no doubt by it’s administrator Deloitte wanting to clear as much stock as possible before other high street retailers declare all-out-war in an attempt to salvage something from this Christmas shopping season by slashing prices across their stores.

The opening shots were fired by M&S when they held their first 20% off everything one day sale, with other retailers quick to join in by holding their own one day sales.

With discounts of up to 50% in Woolies the result was dramatic with the ailing chain on Saturday experiencing it’s busiest day ever in it’s 99 year history. Judging by the empty shelves and long queues in my local store shoppers were keen to take advantage of Woolies peril.

However, fighting my way through the store looking at the tickets on the shelf edges the savings were no where near 50% on most things, in fact the majority of goods had only been discounted by 10-20%. Many items such as CDs, DVDs and games were still more expensive even after the price reductions than the major online stores and supermarkets.

So why were the stores cleared out by eager shoppers if the discounted prices still often reflected poor value?

One explanation might be that early shoppers snapped up the real bargains on items such as toys which always reflected good value for money from Woolies, and perhaps grabbed a few other items too which could have been bought cheaper elsewhere.

Another explanation could be that people followed the crowd, so having seen other shoppers rushing to clear out Woolies they assumed that everything must have been a bargain and did the same. This is a phenomenon known as ‘herding’ to economists.

The final possible explanation that I can offer is that for many people Woolies has been as much a part of Christmas shopping as Turkey is to their Christmas dinner. So news that Woolworths is very likely to disappear from the high street in a matter of days led to panic buying, with shoppers desperately rushing to experience ‘their Woolies’ one last time.