I'm buying cafe and newspapers regularly so I know what they are priced at.
I also know that many companies are against the dogmatic price rising at the first of January.
Price changes are often announced during the first half of the year.
The first of July is also a good moment to raise prices.
Until this year a cup of coffee (in a coffee shop) and a newspaper where priced equal: one euro.
Now both have gone up.
The newspaper by 10% and coffee in some placed up to 20%.
The price of the newspaper and coffee has been stable for a few years, now both have gone up.
"Why now?" I wonder.
One explanation and view on the situation - other that the accepted practice that costs have increased which must be compensated - is that such an increase is a leading indicator of the company (near) future profits.
These will decline.
The price of the newspaper has been stable for the last two to three years, and in these periods the economy was prosperous; there was an increase in the number of advertisements, salaries went up, people could spend more and all newspapers saw their profits go up.
This was despite the free-tabloids with heavy advertisements.
Now, consumers save on luxury as newspapers seem to be.
The costs of publishing do not decrease and the only measure to compensate less income is to increase the price.
This can only be interpreted as a sign of weakness.
The prospect of lower revenues can only be compensated partially on consumers; a salesman who is to sell the same product at a higher price will face a tougher job.
Revenues are likely to fall, despite the price-increase.
H.
J.
B.