WILL PRICES GET LOWER?

Auckland Star, Volume LII, Issue 157, 4 July 1921, Page 8

WILL PRICES GET LOWER?

THE SOFT GOODS SITUATION-. FROM A TRADER'S POINT OF VIEW. ■ WEARY OF CONSTANT SALES. THE PROSPECT OF IMPORT * SHORTAGE. I Whether people secure such rnoneyeaving bargains at sales as is arguell by the seller, has always been a subject o£ controversy between those who revel in this form of mental excitement and those who stay away, but their abolition would certainly deprive a large percentage of the female population of a never-falling source of entertainment. What the trader thinks of it all is an aspect that doe 3 not seem to exercise the imagination of the average citizen, but the welter of sales that have showered their bleseings or otherwise on the good people of Auckland of late makes it interesting to learn the opinion pf the seller on the subject of prospects. A leading 'business man in the retail soft goods trade, in discussing the situation this morning, made it clear that the traders were heartily tired of sales, and also ventured the opinion that the fall in prices has reached the nadir. "The existing condition of continuous special sales has been caused mainly by money tightness and not by reason of goods bought at lower prices," he remarked. "The tremendous importations during the past twelve months tried the financial resources of many toaders to the utmost. The pressure put on by the Banks, who also had limits, and the need for cash have compelled many traders to dispose of their stock, in some cases with small margins of profit, and in others at an actual loss. It is also to be remembered that the importation figures were made to look large by the recent inflated values of goods, and in some measure were not due to in- " creases in the quantities of goods.

K Durin-» the past six months there has been practically a cessation of orders for overseas, co that very little stuff w

•to arrive for the coming season. At on there is nothing surer than ■--• .that there will be an actual shortage of i many lines. Though some Louses now have the money and want the g-oods, the lack of Bank credits in London practically prevents, them from placing , orders of any size. During the nest two j~ months most of the wholesale and retail soft goods houses' particularly will be having thpir annual stocktaking. TLis prospect accounts fort j, good deal of the bargains being offered now. As botli wholesalers and retailers will then have considerably reduced their etoeks and cut their losses, it is certain that after, say, August 30th, price-cutting campaigns will be at an end. The financial situation of moat traders lias improved toy the conversion of stock into cash, and by the increase of 6hare capital or ' issue of debentures." ■

NORMAL TRADING DESIRED. * "There is a widespread feeling amongst ■ drapers particularly that they would like to come to the end of constant sales and

resume normal trading. Possibly many | of their own customers will feel the same way about it. Therefore, it is probable that with the opening of the spring business trade will operate along the old lines. A report was'cabled frem London the other day that warehouse stocks were getting low, and prices showed signs of hardening. This is quite easy to understand when it is known that many factories have been closed down for months. Again, the coal settlement just announced will make things brighten up in England, and will increase the demand for mill products. The United States, which 'went through a period ot drastic price cutting, has now reached a stage of stabilisation, and trade prospects are, reported to be improving. As their summer season is now on, it is

bound to make business better. Another factor against cheaper British products is the arrangements made for trading with Russia, thoughjikely to lead to only limited transactions at first. Then there is the long-awaited determination of the amount and term , * of settlement of the Germans' reparation, which should improve European trade prospects and benefit Home manufacturers, while the reduction in London of the bank rate interest will help to move the wheels of industry and commerce.

'While the pressure of financial difficulties dtiring the past half year has compelled traders to dispose of goods in absolute disregard of replacement costs, it ie ridiculous to expect businesses to continue indefinitely to be run at a loss," declared our informant. "So, bearing in mind all these considerations, it is not reasonable for the public to expect substantial reductions on present prices. The number of lines which can be bought at prices below those now held in stock is not extensive. It is quite possible, also, that before the end of the year arrives money will get easier, resulting in more trading. We shall then have a scarcity of goods in the Dominion, with a combined rush of cabled orders for goods. This can only mean that prices may go higher for a time, until stabilised prices can be quoted and commerce transacted on a more normal basis."