Thursday, 15 January 2009

Permanent credit crunch

Read an interesting opinion column in the Guardian the other day saying that the very poor, just like the very rich, are immune to the effects of the credit crunch. They don't have mortgages so are unaffected by house prices, many are unemployed, so no fear of redundancy, and few have shares or savings in Icelandic banks. If anything, the perennially skint are slightly better off as retailers slash their prices and compete more aggressively for budget shoppers. Tesco, for example, have introduced more discount lines to their shelves. 

The journalist also points out that whilst supermarkets may undercut the price of corner shops, the very poor will still frequent the latter because for one, many don't own cars, but more interestingly, local shop owners may give 'tick' to customers they know well or who can't afford to pay until a later date. A courtesy and service the likes of Tesco do not provide. 

When I was in Australia there was a popular service known as 'lay by' where you could pay a small deposit to put an item on hold until you could afford it or pay in installments in their equivalents of Topshop. Whereas this is seen as a bit cheap and nasty in the UK by consumers and retailers alike, it's a completely normal and acceptable thing for young, relatively affluent, trendy women over there. 

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