Retailer's panic

Retailer's panic

Some time ago while doing some shopping, if not window
shopping, in the Adidas store at Plaza Senayan my wife found a
baseball cap that she needed for her outdoor activities. The cap
she selected was priced Rp 40,900. After paying for the purchase,
with the merchandise already in a bag in our daughter's hand, we
were approached by the owner who had decided at that moment to
raise the prices.

I was a little shocked to find out that this increase was
retroactive to our purchase, which was already paid for and
nearly out the door. He had decided that an increase of Rp 9,000
was necessary at that moment. This over 20 percent increase was
warranted because, as the owner said: "Every retailer is
panicking, so we have to raise our prices."

The additional surcharge was no sacrifice for us, so we
quickly paid and exited before additional charges could be added.

Business requires proper planning and fiscal budgeting
responsibilities which, in tandem with customer demand and
acceptance, provides some latitude for pricing mechanisms. Panic
is not a mechanism on which to base sound business practice.
Panic-stricken retailers desiring to maintain the cash flow of
only several months ago will be disappointed.

Price increases such as the one I was directly involved with,
and those of even basic commodities that are a result of
retailers "panic" and yearning to maintain expected profit
margins are only producing "hyperinflationary" recessionary woes
to the country.

Economizing overheads, reducing expenses, invoking cost-saving
measures and coengineering retail/wholesale plans with suppliers
are sounder ways of protecting one's business in this time of
economic woes. Those businesses which can survive the present
period with or without limited consumer sacrifice will be the
eventual winners and maintain a large market share.

MOCH. NORMAN A.S.

Jakarta