replicating the gfc crash of 2008, page-9

  1. 291 Posts.
    Kincella
    I am in retail and we are down between 15/20%. I am in the fresh food markets 6 days a week and I speak to many colleagues who have experienced similar reductions in spending regardless of their position in the market. We have been discounting heavily to try and stimulate sales. Its a double whammy - normally most businesses in our sector work on 40% GP. We are lucky to get 35% and our turnover has decreased.eg Turnover $60000per week at 40% gp = gp $24000 - turnover $50000 @ 35% $17500 gp. The bottom line is getting smashed.
    The simple explanation is that people have stopped spending! Why? Sentiment,probably. Too much debt, more than likely.
    I employ a bookeeper once a fortnight and she has many clients from a wide variety of businesses. The common theme from her is the high level of debt people are carrying. Steven Keen was on the money - 'retail spending will experience a decrease of around 20% because of the level of household debt'.
    It makes you wonder how house prices can remain at current levels
 
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