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