Supermarkets – is the pricing war beginning to limit our choices?

 

Where and how do you do your grocery shopping? Do you shop online? Or visit the supermarket? Do you shop daily, weekly or monthly.? Does where you live affect what you pay?

All of these options affect prices as the supermarket giants compete for customers.  I did a bit of internet looking as analysts are saying that the huge investment into price cuts at Woolies will not make a lot of difference. Why is that?

A survey in 2009 showed that Aldi was not only cheaper but popular, people perhaps finding the combination of quality with good price attractive. Despite a rise in overall sales for Coles and Woolies since then, your Aldi basket is still cheaper – wherever you live. The increase of costs in certain areas are due to multifaceted reasons, transport, regional differences in size and what is retailed ad local competition.

One thing is clear the “Aldi Effect‘ is alive and kicking. This simply is a term to describe how that shopping at supermarkets within a kilometer of an Aldi supermarket significantly lowers the cost of your basket.  This lower cost often is associated with bargain offers on leading brand names but equivalent goods at Aldi are cheaper. As more and more supermarkets offer private labeled goods and the reputation of said goods has improved, with many people believe the quality of these labels are as good as leading brands. There is a potential drawback to this trend through, a hidden cost, as private labels attract the sales more and more niche brands are disappearing from the shelves and choice could start to be limited. This article from 2014  might be even more relevant today than it was then.

I find more and more of the niche brands I used to buy at the supermarket I have to go online to purchase, lessening my choice of availability is also reducing the number of times I will go physically to the supermarket. If I am going to shop online which is easy to do I might as well do all my shopping that way. Anyone else concerned about  having reduced choice? what are your feelings regarding your weekly/monthly shopping?

So why will Woolies not attract more customers with its cut prices, numerous reasons, competitors reducing prices too, less choice, confidence in the integrity of the company declining. How do you think a price war will impact your weekly shopping? Let me know in the comments below.

Hurtling towards Ice Age

The extreme climate changes all over the world is dangerous. It is a warning by nature to stop the exploitation. I am also feeling the change. the weather is going topsy-turvy. Hotter summers and colder winters. Are we headed for an ice age which will wipe most of human population? It seems so. There are many signals which show that it is happening.

• Heat waves, rising sea level and flash rains have affected the whole world. The scientists say that these are all signs of Global warming which will lead to a shift in climates all over the world. The deserts will have rains and river plains will experience drought.
• Flash floods, Forest fire, Tree diseases and insect attack are depleting the forests all over the world. Is this the effect of our sins against nature. Well research says that this will lead to increased level of Carbon Dioxide which has been a cause of ice age earlier.
• Reduced Agricultural produce and lack of fit to drink water will lead to war. It has been predicted that the Third World War will be over water. Well it was some wise man who predicted that. All signs are of famines and drought.

The need of the hour is to stop all industrial activities over a period of time and go back to the earlier life-style. But will we do it? I think not. The Ice Age is coming and this time it is not an animated movie.

Money – An invention that is going too far

Earlier man used to exchange goods with each other for making living better. It was difficult situation as both people had to want each other articles for the exchange. The human mind then invented the money. It came in many forms and finally the form we are seeing – Notes and Coins. It really made life and transacting much easier. But what is happening today. People are living for the money they themselves invented.

The invention of man ” Money” is taking control of their lives. A man is no longer respected if he has only knowledge, but definitely respected if he rides a limousine. That is the irony of modern times and it is affecting our lives overall. The mad rush to get rich is taking away the spirit out of life. People will work in their hey days and then in old days struggle with relationships. This is what money has done to our lives. An invention that was supposed to make life easier is become the most disruptive for life. So what do we do when everybody is running in the same direction?

The solution is not very difficult. Try and make goals which make your life easier. Having money is essential , but should not be the sole purpose of life. Let me explain with a funny story.

There was a wealthy man who was a miser. He used to work hard and gather money. Due to constant pressure of work he died early due to heart attack. He had a servant whom he did not pay his whole life. After the wealthy man died the wife of the man married the servant and the servant enjoyed the money. The servant said -” The whole time I thought I was working for this man. But it was him working for me”. So, people enjoy the money you have and change your preferences from money to life.

Tax a Burden or Necessity

 

Taxes loo to be a burden for everybody, especially for individuals.Taxes are a way for governments of communities, societies and nations to exert an influence. We vote in the leaders, and in doing so entrust them with the responsibility of investing in whatever part of society they deem fit. To pay taxes, is to be an equal part of the country, in theory. However, when members try to avoid paying such dues, no matter how big or small, it has a hugely detrimental effect. The larger the organisation or person becomes, in money terms, the larger the amount of tax they have to pay. And as spoken about before, this is where the murky world of politics, economics and corporations collides. Large corporations are able to operate on a worldwide economic level, in some ways above the glare of these governments whose own purpose is to control them in the name of the people. Perhaps this is why international conferences and meetings are organised, in a big to control such behavior. But in this current system, I fear for the level of control governments will be able to pull back in their direction.

The need is to manage taxes well. As individuals we should keep track of our earnings, and plan all expenses. This goes a long way in having financial discipline.If we do our part and make ourselves safe we can afford to bring changes.So be disciplined and pay your taxes honestly. This is the way to keep the balance.

6 Reasons to Save Money

Money has become the centre of all activities. Saving money is the topic being pursued by everybody. Why has it become so important suddenly? Every person has own reasons for saving money. Here are some reasons which are real ones.

Reasons to Save

You can save money just for the fun of it. I in my childhood used to really enjoy putting coins in my piggy bank. It was a habit instilled by my father, and I still love doing it but do it differently. But having a reason, always helps you to motivate. Here are some reasons to save money. Any one can be yours.

• Emergency – Always do have an emergency fund and add monthly to it. You can start with $ 100 initially. This fund is for unexpected emergencies. Remember this is not the substitute for insurance. You should always have insurance in place.
• Retirement – Always save for the time when you will retire. This money can work for you and build a fund for living well in old age. Start with contributing to Provident Fund, and increase it to up to 15% of your Gross income.
• House – Set aside some part of your income for the down payment for your own house. The more down payment you make the better interest rates you get from the mortgage companies.
• Childrens’ Education – This is one of the expenses you have to make in future. It is expensive and savings for the purpose can save your day.
• Vacation – Vacations are a necessity in this cluttered world. They help you recharge our batteries. Saving for vacations is saving for yourself.
• Other reasons – Keep a saving fund for all other reasons in your daily life. This miscellaneous fund can help you in all of the above.

 

The Economics of Culture

The most difficult question is – What exactly is culture? Due to this ambiguous nature of culture, economists have been reluctant to include it as a variable. Culture may be defined as the belief system inherited from our Parents, family and close friends. Does it affect economy? Culture does affect people, individually and in group. So obviously it does affect the economy.

People of different Culture in Australia

People of different cultures behave very different. Each culture has a set of beliefs that directly affect the economic behavior.

The debate on culture affecting economy is age old.  Adam Smith started the debate by initially considering it as a variable. But he found it to be very vague. Two of the great economists Karl Marx and John Stuart Mill had different takes on influence of culture on an individual. Mill was of the view that culture affects the economy. On the other hand Karl Marx believed that preferences of the individual were mostly unaffected by culture.

People from different countries buy differently, and invest differently. Two of the most prominent cultural sub factors are – Origin Country and Religion. So a person who migrated to Australia from England has totally different buying habits from someone migrated from Russia. Religion also affects the investing habits. A Catholic and a Muslim will have completely different when it comes to investing.

This is where Economics of Culture comes into the picture!!!!!

Burqas

Was just having a wander through the web news as is my want and I came across this article. Disturbed me on many levels because while decrying that the government is whipping up anti Muslim feelings; the article itself is using it as a dig against the government for their commitment to the fight, on Terror and is just as guilty at whipping up anti government hysteria itself. The article is about the ban on Burqas in the Government buildings. Burqas have been a constant source of debate in the last few years with the increase in security measures against the fear of terrorist attacks. I lived in a Muslim country, Turkey, for some time. In Turkey the Burqas is not compulsory in fact any sort of covering is not compulsory. There, they banned headscarfs from government and teachers. It is not a religious requirement but a cultural one albeit enforced in some countries as essential to the religion.

The article then goes on to use this as a sounding board to attack various government officials of being hypocritical in either their support or lack of to the ban.

The first sentence indicates that the ban does not prevent Burqas wearers from Parliament only from public galleries; they would be required to use the sound proof rooms that have been in use for children. Personally I don’t see anything wrong with this. We have choices in life and some of those choices influence how others see us; wearing a Burqas for religious or cultural reasons is a choice and as in many other countries because of the unfortunate actions of militants we have to protect the many.  The article says the security measures are a pretext as everyone has to go through screening devices, as far as I am aware this does not include facial recognition… women and men can be terrorist and both can hide under Burqas. I feel the ban currently is within the boundaries of responsible security measures, the article for me is of more concern for its deliberate use of the ban to incite anti government feeling.

Money-free economics

As I am not just interested in economy as well as science and this year’s Nobel Prizes have just been awared, I have been reading up on a few recent winners and their discoveries. Among them I stumbled over Lloyd Shapley of UCLA and Alvin Roth of Stanford University who won the Nobel Prize for Economy in 2012. Their whole theoretical spiel was about economic exchanges that do not involve money.

This is an extremely interesting way of thinking. We always assume that all our economic exchanges centre on what we get for our money or how much money we get for something we provide. Shapley and Roth looked at the best way to exchange non-monetary goods, including marriage, organ donors or school choice. This also opens an interesting perspective on government policies. Instead of measuring everything in how much more money it brings into the pockets of individuals, coorporations or the state budget, other goods could be taken into consideration.

Does it only matter how much cash something makes or does the degree of freedom a policy leaves us. And I am not talking about the US style freedom to spend your money however you want. I am thinking about decision making freedom as a value in itself. A thought worth pursuing for our government, too.

Housing woes

So demand for student housing is driving up inner Sydney housing, according to this article  based on Reserve Bank of Australia research, but people’s affordability to service their mortgages has not changed!

Well, to me the reality of that seems strongly hidden behind a big smokescreen – maybe it’s that people who have held existing mortgages in Sydney are able to continue their payments, but what of the traditional first time buyers in Sydney, I know several young educated people in decent jobs in Sydney all saying they will have to struggle hard to even consider getting on the property ladder there. Maybe the new mortgages are being driven by these overseas students whose parents are able to pay the ridiculous prices now being expected.  Is mortgage serviceability being balanced off by using general Australian statistics instead of Sydney focused ones, I just can’t see how they can really say we’re still in a place where average Sydney renters can consider starting a mortgage, let alone convince the banks (who are happy with drawing money from these overseas buyers) that they can sustain it. I think if any young middle class worker is going to seriously consider buying in Sydney it will be through a Ferratum lender or other such loan companies to get them started.

Here in smaller cities like Brisbane we’re so far still blessed with affordable mortgages, but with a growing education sector will we see the same jump in prices – I hope for us that’s a long way off.

Positive People Power(less)

It’s nice to see people mobilizing for change. I’ve become convinced that the power-hungry elites who are pulling the strings backstage aren’t motivated by planet-preservation and global interests. It makes sense as it’s very hard for any of us to truly claim to have a genuine global interest. Only people who refrain from using modern technology, eating meat, burning fossil fuels and a host of other unwieldy and uncomfortable adjustments can really say that we’re living our lives with the great global good at heart. Yet people still seem to be at least interested to engage. Here we’ll soon be seeing marches and demonstrations to try and raise awareness for climate change – it’s a promising prospect. Yet I can’t shift the undercurrent of pessimism which I’ve lately been developing. Although it’s great to see people being pro-active and taking to the streets, this story from June reinforces the musings in the last post – what’s the point? As one of the biggest global contributors to carbon emissions it’s saddening to see that our government are hell bent on ensuring that our consumption and contribution continues unabated and unchecked. Policy is the only level on which we can see change happen, and when the safety nets and checks which control our carbon usage are being eroded and stripped away little by little, it seems that no amount of peaceful protest, songs around the campfire or organized demonstrations can hope to have any effect.