COST OF LIVING

Dominion, Volume 29, Issue 220, 13 June 1936, Page 12

COST OF LIVING

Retailers Anticipate a Rise CAUSES DISCUSSED Legislation Not Wholly To Blame EFFECT OF BETTER TIMES An early and general rise in the cost of living is indicated in more ways Ilian one. This rise, which people are beginning Io sense already, is due to several anises. One of these causes is Die emergence from the depression to better times all round, with an appreciation in the price of our primary products. A secondary cause is Die comparative fluidity of money to-day as against the static condition of a couple of years ago. But lierhaps the most potent cause of Die rise in the cost of living is recent legislation passed by the Government, notably that affecting wages and hours of employment. Such vital matters have an almost immediate repercussion, as tradespeople cannot increase wages and give shorter hours, without seeking the only compensating avenue of higher prices. Prices are likely to go up in three quarters, the first of which is the primary producer, who has to pay more for farm labour and shorten the hours of employment to his hands; secondly, the manufacturer, who is faced with corresponding liabilities; and thirdly, the store-keeping retailer. So the consumer will willy-nilly have to face all three rises in the cost of purchases, rises that cannot be avoided. Grocery Lincs. Unless one excepts dairy produce, there has so far been no general and decided move upward in the ordinary run of groceries. That is to say that in the large majority of instances tinned and packeted goods are much the same as they were six months ago. but. as one grocer put it, the new order of things does not come into adoption until July 1. when it was anticipated there would be a slight rise in such lines. Eggs have shown a tendency to harden lately. After a recent weekend they rose 6d. a dozen, which was rather unusual, as though the tendency was usually toward an increase in mid-winter, the price did not rise by so much. Eggs, fresh laid, were being retailed at 2/4 a dozen, whereas they could be purchased six months ago for .1/6 a dozen. This may be seasonal, but the rise was considered by some to be abnormal. Bacon (per side) bad risen 2d. a pound in the last six weeks. Butter had followed the meteoric rise in London, and first grade, which was selling at Christmas for 1/-, is now 1/4 a pound locally, witli an inclination to firm, if anything. Butter is an everyday line, and naturally it affects the cost of living. Cheese is also showing a slight upward movement. Coloured cheese, which was selling a month ago for 6d. a pound, is now 7jd., while the white (matured) retains its price, 1/a pound.

A few years ago it was possible to purchase a 701 b. bag of No. 1 sugar for 12/9 retail. To-day’s price in the grocery store is 16/2. Sugar is a necessity of life which in this country is in the hands of the Colonial Sugar Refining Company, which refines sugar grown in Fiji. Indeed, it is practically New Zealand's only trade connection with Fiji. In former years New Zealand used to trade to some extent in fruit with Fiji. Then our merchants used to do a little business with the gitip, through having a more or less regular steamer service, but the bulk of Fiji’s trade is now with Sydney. Only the sugar boats come this way. No one knows when a rise or fall in sugar is to take place until the order is issued by the head office of the company in Sydney, nor is it deemed necessary to give any reason for such price movements. New Zealand in the past has been very fairly treated by the company, and there is no reason to feel that the latest price is too much, as labour conditions in Fiji have been improved, and these have to be paid for by the consumer. There is not a great deal being said of the fact that milk is dearer this winter than last. This is no fault of the municipal milk department. It is simply because butter-fat is worth more to-dav than it was last winter. For the same reason that butter is now being retailed at 1/4 a pound for first grade, instead of lid. or 1/- six months ago milk is costing the householder 6d. a "quart instead of sJcl., as was the case last winter. It is the London parity which calls the tune in both cases.

Situation of Restaurants.

Inquiries among restaurant-keepers revealed that competition was very keen, and so far the price of meals had not been advanced. It was stated, however, that, consequent upon recent, legislation, not yet in force, some advance would have to he made shortly. To that end a Restaurant and 'Tearooms Union of Employers had been formed in Wellington, and was going carefully into Hie situation created by the laws recently enacted, with a view to ascertaining exactly Hie position. There was no desire to increase the price of meals, but the trade had to protect itself. and that meant that, a rise in price must come in the near future. Hotels Affected. “1 have jus.t been into the position very carefully." said one proprietor of •i well-known city lintel. "My 'tariff to-dav is 16/- a day. Here and there there may he slight, concessions, and if extra serfice i* required the tariff might be a little higher, but Ib/a day i.s the basis. We have, a<r from June 15 to employ our hands 44 hours over ... week of 5j days, instead of 48 hours over a six-day week. A hotel has only one chef, and for the ehet I who has Io supervise the dinners) to l„. absent for two dinners is a very serious tiling, yet that is what it means when they get a day amt a half oft. As to the staff, the curtailed hours means tin- employment of an extra band for every s.gveii. This means, Io keep us square only, that the 16/- tariff must, he increased to 18/- or 18/6. Even Hie smaller hotels will. I feel sure, have to increase their tariffs 2/- a day. unless they wish to cut their own throats. "Then Hie 40 hours a week law becomes effective in September, and the situation will have to be reviewed once more.”

It was stated by a prominent builder that t.jjere bad been certain price movements in the materials required in the trade. Since January timber had risen

by about 3/- a hundred feet averaged over all classes used in house-building. Ou Die other hand, cement prices had been reduced. General builders’ hardware had .shown little fluctuation. He anticipated Dial prices would advance when the new industrial legislation became operative. Hardly any movement in tlie retail prices of paints, wallpaper, varnishes, bevelled glass and similar commodities used in house decoration Jias taken place since January, it. was stated by Die management of a store dealing in such articles. While the price of waitpapers liti'l remained stationary lor many months —perhaps a year—the

qualify offered by the English and Canadian manufacturers was undoubtedly higher than it hail ever been. White lead prices were, inclined to fluctuate a shilling or two both ways; otherwise the paint line had been stable, imported and locally made keeping a check on each other. Barbers' Charges. Haircuts at 1/3 have been the rule for a considerable time now, said the proprietor of a barber's establishment. That price paid the hairdresser and seemed to find few complaints among the customers. When the 44-ltour week began to operate it was unlikely that the reduction in hours would bring about an increase in the cost of a haircut. Barbers would no doubt recover the extra cost of running the saloons by speeding-up a little and spending less time in exchanging information about the turf or tlie weather with the client. Footwear Prices Climbing. Footwear prices have increased steadily for the last nine months, according to those in the trade, due to the rises i;t the prices of leather, a general movement affecting footwear made in Australia and England, as well as that manufactured in New Zealand.

Tlie increase since last January was yesterday estimated at being from 1/6 to 4/6 a pair for shoes, depending on quality. It was stated that women's shoes now cost from 1/- to 2/- more to make than six months ago, men’s shoes 1/8 more and children's at least 1/tnore, these increases being for New Zealand. In Australia and England there had been sharper rises. A statement that contracts for supplies were being renewed only for three months at present, in case legislation caused further increases in manufacturing costs by the end of that period, was made, the expectation being that wages cost would be higher then, so that retail prices would be higher in consequence. "Retailers have to a. large extent borne the increased costs so far,” one man said. “But they cannot go on doing so much longer, and the increases will have to be passed on.” "When reduced hours and higher wages come into effect in the factories prices must rise, because shoes and boots will cost more to produce,” said a retailer. "We will be back to war prices before long.” Clothing Not Dearer.

Leading retail houses stated that clothing prices had not risen in the last six months, except for underwear and blankets, which had become dearer because of higher prices for * wool. The increases, however, had been very small, in the case of underwear amounting to not more than 6d. a garment.

"What the effect of the new legislation will be no one can say,” one retailer commented, “but it seems obvious that higher wages costs with larger staffs through the reduction of hours must cause prices to rise to some extent. It may be that, with more people employed at higher wages, the retailer will reap considerable benefit from the legislation, because people will have more money to spend. In consequence staffs, which are at present on depression size in many shops, will probably have to be built up again.” There has been no increase in stationery prices, according to one city firm, which said that the rates ruling were the same as those at the beginning of the year. He mentioned, in fact, one instance where the price was actually lower. A 500-page writing tablet, which in April was selling at a shilling, had now been reduced to ninepence.

Practically all the paper used in the manufacture of stationery in New Zealand is imported. It was stated yesterday that a hardening of prices for paper supplies had been reported in England. If that, were so, then the position would be reflected in New Zealand later. However, this was a factor quite independent of the prospective rise in labour costs in the Dominion.

The manager of one stationery shop made it clear that the rise in costs must be followed by some rise in retail prices. The precise extent to which the one affected the other could not, of course, be determined as yet. and he was emphatic that there would be no anticipating the rise in labour costs, which had not yet come into effect. “Along Right Lines,”

“Labour is proceeding along the right lines,” said the manager of a large cake and pastrygoods establishment. During the past ten years he had paid £7OOO in wages above the award rates, he said, and it was his intention to continue to do so. "Good wages mean good profits,” he said, arguing that thereby more purchasing power was put in the hands of the people to circulate more freely. “I don't care whether the man who has some money now which he did not have before has a cup of afternoon tea or a beer. The main fact is that he is spending, and I am going to get my share of that.”

The prices of his goods had certainly not been raised since January 1, he said, and it was his firm intention not to raise them, he added. He expected his business to increase simply because more people would have money to buy cakes ami take a cup of afternoon tea. During the depression he had lost a lot of trade because numbers of lunch customers had brought their own cut lunches from home and eaten them in the office. That would be different now.

Retail meat prices nre related to the prices obtained on the London market, in much the same way as Now Zealand butter prices are so related, the head of one butcher firm explained. 'There had been a slight increase on the price rate of January, but that was a reflection of Homo market prices. The price of both vegetables and fruit. Iliietnate on a seasonal basis to a great extent, and that apart, it was gathered that there had been no recent all-round general increase in prices. Fish is in much the same position, although one man showed reluctance Io discuss the situation, saying abruptly. "You had better see Mr. Savage about that!”