August 28, 2018

...AND CHEAPER...:

'A truth which must not be spoken': what's really happening to prices (Ross Gittins, 28 August 2018, The Age)

Last week Reserve Bank deputy governor Dr Guy Debelle gave a speech which departed from the official talking points and revealed a truth which must not be spoken: the digital revolution is squeezing many retailers' profit margins and forcing them to cut costs so rising prices don't cost them customers.

Debelle says that, since 2015, the price of the typical food basket (excluding fruit and veg, and meals out and takeaway) has actually fallen a fraction. Fruit and vegetable prices have risen, but by only a third of their average rate over the past 25 years.

The prices of alcoholic drinks have risen more slowly since 2015, and non-alcoholic drink prices have fallen a bit.

The prices of consumer durable items, including fridges and furniture, have been falling since 2015, meaning they've hardly increased over the past 25 years.

The prices of audio-visual equipment - including TVs, computers and phones - have fallen significantly over the past 25 years and particularly the past three.

Posted by at August 28, 2018 4:04 AM

  

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