Inflation and the decrease in quality of everything.

Over the past week I've observed some real changes in the retailing industry which proves the reality of high inflation.

I've been shopping for new office furniture and visited a number of shops including Officeworks which I last visited back in 2003 when I bought a very decent quality office set of cupboard, return, desk and filing cabinet for $1000. At the time, Officeworks had many different styles of sets of office furniture with a real quality to them.

Last week I saw no trace of quality at all. No sets, just isolated product lines all made of crappy particle board or if it was timber, the cheapest knotty pine crap you could imagine.

This set me looking more carefully in other shops and the same was true there too. Office stool, my old ones have a thick metal plate and quality stitching. Latest ones have bare minimum construction, plastic legs, stitching that appears to rely on glue and a few large staples rather than the small and numerous staples on my old ones that are still working and respectable after 15 years. These new ones would barely go a year by my eyes.

We all know the story of how inflation affects goods like toilet rolls and food packages. Same price, less quantity.

I think the same is very true of the economy in a broader sense.

Prices the same, but decrease in quality = inflationary environment/policy.

Inflation is the silent thief that has ground our economies and societies down to the ground. Governments steal and spend at the expense of all these silent witnesses to that theft.

The furniture you sit on to only break in a short time, the washing machine that no longer cleans, the doctor who gives you only 2 minutes of time for the same remuneration from government, all of these things and more are the effects of inflation.

Consumers resist price increases less when they occur in the form of decrease in quality.

 

its not only the products its also the service or lack of

 

Yep, the Australian consumer demands cheaper prices and accuses retailers of ripping them off. The chicken has come home to roost. People are too stupid to realise that everything comes with a cost, and if you demand that everything must be cheap for you, then be prepared to live with cheap s%#t consumer items that you will have to buy over and over as they break. Retailers are giving you what you have been demanding Australia, enjoy your low quality cheap plastic future.

 

It's very insidious.

People fail to realise that quality decreases are equivalent to having a price increase.

If you are paying the same amount for less, no matter what it is, less quantity, less quality, less time; then you are paying more!

Not only are you paying more in effect, you are not getting what you think you were.

If these price increases weren't masked, then the prices of things would be much much higher than what they are now. Inflation is kept invisible as much as possible and indexes etc, do not show what is really going on.

Eventually there will be the straw that breaks the camel's back.

 

The problem is that rising prices are the flip side of the falling purchasing power. As this becomes more apparent, so does the pressure on interest rates including the interest rates on sovereign debt paper, and China knows that it cannot keep shipping real goods out of the country in return for government "IOUs" much longer.

 

http://en.wikipedia.org/wiki/Is_It_Just_Me_or_Is_Everything_Shit?

An English slant but at least you know you are not alone!

I have seen this when I tried to build a boat. Apparently the quality of Marine Ply has dropped so much that it is no longer any use for building boats! The Chinese said do you want quality or cheapness and Australia voted with their wallets!

 

Don't expect this to be repoted in CPI figures...the crapping down of goods will not be measured. You will buy more crap next year.

 

I like this post.

I see this all over but I think the second, very relevant point to add, is that 99% of people accept it.

Further to that, they LIKE it.

"You should've seen the bargain I got the other day"

Yeah, a great bargain, on a piece of shit.

It's all over, every store I go in.

Flimsy beds, threadbare t-shirts, which are knackered after just a few washes, make no mistake, we live in a throwaway society.

This stuff is built to break so they can sell more of it.

 

I like the plastic watering cans which you have to store out of sunlight otherwise they crumble when you go to pick them up, only a couple of dollars...bargain!

I bought a metal one because I got fed up with not having a watering can when I needed one. It went rusty!

 

and on top of that they still make good profits .... never forget about the profit margin ...

 

Reminds me of the NEW VW & Mustang bumper bars you can get $120
The VW ones rust within weeks
& the Mustang ones don't fit properly
Made in Mexico

 

I think now more than ever you just have to be mindful of what you're buying and what you want out of it.

Case in point: a mate of mine and I both decided we needed new kitchen knives. He went to a big department store and bought a top-of-the-line set for $360. I went to the fish markets and bought a very decent set for $55. The difference in quality between the two sets is marginal but his might last a bit longer than mine given proper care.

On the flip side, I pay more for green electricity supply because I want to see reduced demand for dirty energy.

With so many options these days, the consumer really has to take a few minutes to think about what makes the stuff they're buying "the best". Lowest price? Highest quality? Locally manufactured? Carbon intensive? Recyclable? Will it actually do what you want it to do? Do you even need it in the first place?

We really need to think more. Generally. About everything.

 

I had a similar discussion with some old flying mates of mine recently about airfares. People are demanding cheap airfares (see tiger today advertising $25.95 airfares Melb to Syd) and then everyone gets upset when the aircraft break because maintenance is pushed back, service is lousy because staff are minimal, errors are made due lack of training and safety is compromised despite management assurances that "safety comes first". How can you maintain, run, service and replace multimillion dollar aircraft when you are charging $25.95 for a 1 hour flight from Melbourne to Sydney and still think that "safety comes first"?

malachii

 

When the retailers costs drop, they don't pass on the savings to their customers, they leave it where it is.
That sort of attitude means the prices never go down, they either go up or stay the same.

That drives the needs to find cheaper goods, which the retail industry has responded to by offering lower quality.

And now the consumers are buying offshore, which is even worse, because that means they are biting the hand that feeds.

Basically, everyones attitude is "screw the other party" without realising the long-term effects of their actions.
Both retailers and consumers are at fault, and behind the shadows, the suppliers are at fault too, because they don't pass on their savings to retailers either.


It is time Australia pulls out of the globalisation game, implements protectionist measures, and focuses on stabilising the local economy.
Then maybe we could regain a manufacturing base which supplies good quality products to our retailers, and unemployment would be lower, meaning the race to the bottom would be nullified.

I know lots of economists would say that's bad because there can't be "growth", but they should realise growth isn't infinite O_O


Not long ago the media reported on how many businesses are looking to onshore immigrants for labour.
They don't want to train the locals on the job.

Looks like the generation before me got too used to having everything working automagically without putting any effort in, or planting the seeds of the future >_>

 

Indeed.

Ya know intelligencer, this thread on quality reminds me how my dad always says that back in his days everything was built better.

 

Agree with most of what everyone has said so far but just thought I'd add one little thing to the discussion.

There are two basic type of consumers. Consumers that look for best price and consumers that look for best quality to price.

In China there has been a recent trend in the markets where 'quality brands' are picking up even with high prices. The goodwill and brand name and the security/satisfaction related to buying good stuff warrants the high prices and consumers are ready to pay it.

I'm pretty sure we'll start seeing this in Australia soon, premium brands and products/services will start surfacing. There are multiple avenues out of this crap trap and the race to the bottom isn't the only way.

Qantas picked the lazy way out instead of reinforcing itself as a quality airline.

Plenty of places sell quality stuff in Australia, you just need to take a look around and not shop only at Myers or DJs.

 

Plane flights are so cheap now I don't want to fly. I was looking incredulously at the price of a ticket to, I think, Qld and the next day or day after that tiger got grounded. I don't want to fly in planes run by companies on thin margin.

 

deleted due concern for identification and legal action.

malachii

 

Strangely enough I think that people will pay more (up to a certain point) if they believe they are getting fair value/worth. My understanding of the changing nature of sales is that given how time-poor people are + the power of Google, if the average retail shop was the really step up their game re. their sales/marketing and quality instead of competing on the cheapest price, then people would still buy it. Tony Gattari of the Achiever's Group in Sydney goes into more detail about this & that when you make yourself 'trustworthy' by listening to the customer and giving them what they really want then people will come back for that same experience

 

Interesting thread that has bemused me for some time.

People complain about the 'cheap crap' from China, but this is what the Australian distributors buy. Most Chinese will not buy any of this quality and laugh at people who do.

In the 'fake goods' market, it is well known, except by Australians, that there are about 5 quality ranges of fakes, ranging from absolute rubbish at the bottom, to the real thing out the back door at the top (watches, clothes, leather goods, everything). The trick is to get customers to pay a higher range price for a lower range product, and this is the story of Australian retailing. They buy the crap and foist it off on the public as good quality, and the public blames the product and the Chinese rip-offs, when it is the wholesalers and retailers who buy and peddle the stuff who are responsible.

How many times have I seen Aussies at the markets yelling at a vendor, wanting their money back; "I paid you 500 and this other shop is only 200, you ripped me off " What they forget is that they made a judgment and bought it, the vendor 'asked' that price, the 'buyer' agreed that price. There is no government mandated consumer god who tells you what to pay, make your own decisions.

The fact that people are now questioning the retailing awareness is encouraging and will lead to far more efficiency and a better selection of goods. Note the article in today's press about a politician asking why Australia pays more for Apple products than the rest of the world. The article and associated comments goes on to expand this to everything! Why, because until now, Australians have never questioned, just paid what they were told ! http://www.theage.com.au/digital-li...to-confront-ripoff-claims-20110819-1j17p.html