The root of what’s going on here can feel obvious: blame inflation, which picked up in mid-2021 and throughout 2022. But that isn’t really the issue anymore, at least not at the current rate, because inflation is coming down. The actual problem here is prices.
They’re not going up nearly as much as they were in, say, the middle of last year, but they’re by and large not declining en masse, either. And in most cases, they won’t get back to where they were in the Before Times.
I can confirm. Was in retail management until recently. Owner regularly boasted about how much money he made because he saw the beginning of the pandemic and bought a ton of product at the low prices they were at before prices started going up. Then raised prices to be 30% more than the competition raised prices.
“People expect prices to go up, but they won’t be able to shop around so they will pay the extra. With all the shipping and package theft problems nobody will trust Amazon so it doesn’t matter if we are charging nearly twice as much. They want what we have and they will pay the price we set.”
When I left they were still nearly double the price of LOCAL competition and still pulling profits. The thought is even if 30% of the customers leave and go somewhere else, with the margin being ridiculously high we still came out on top.
“We make money by being the first to raise our prices and the last to lower them.”
“We” was actually the owner.
Bonuses were “Not Available” due to rising cost of operating during a pandemic. Raises were limited to cost of living increases based on state adjustments (which were far lower than our area).