REDUCTION IN PRICES.

New Zealand Herald, Volume LVIII, Issue 17780, 13 May 1921, Page 6

REDUCTION IN PRICES.

SEVERAL CLASSES OF GOODS.

AVERAGE DROP 20 PER CENT.

FUTURE POSSIBILITIES.

When the end of the war came, there was a feeling in many quarters that the reign of high prices would also be brought to an abrupt end, and that pre-war conditions would quickly return. This idea was refuted by every business man. and it was freely stated by those in a position to judge, that it would be fully two years before any substantial reduction in prices reached New Zealand. Such a pronouncement was very disappointing to most people, but time has proved this forecast to have been remarkably accurate. After ypars of unprecedented high prices, the first indications of falling Home markets were received in New Zealand about last October, and during the last month there has been a great reduction in retail prices in drapery, footwear, groceries, and other lines of goods.

Although it was known months ago that prices were bound to fall heavily, it is only within the past few weeks that any substantial drop has taken place in retail prices. Some interesting figures were supplied yesterday by leading Auckland drapers in reply to inquiries as to the actual reductions tliat have taken place since the beginning of the year. Taking things all round, it can safely be said there has been a general drop of about 20 per cent, more in some lines, less in others. To put it plainly, a woman with £8 to spend on household goods ajid clothes for tho family, can now purchase as much as £10 would have given her six months ago. These reductions are spread over practically every line of goods save colonial woollens, blankets, tweeds, etc, which show no lowering in price as yet. The reductions vary somewhat, according to the market on which they were bought, and the replacement value, one firm being able to sell a line of goods purchased under exceptionally favourable conditions lower than another.

One firm quotes a drop of about 30 per cent, in white cotton fabrics, from 10 to 35 per cent, in flanellettes, while furnishing drapery has fallen from to 25 per cent. One of the most substantial reductions is in English blankets, selling six mouths ago at five guineas a pair, and now just half that pneo. English rugs, again, have fallen from 42s to 32s 6d.

Other lines in which heavy reductions have been made are ladies' hosiery and gloves, some makes of the latter from 7s lid to 5s lid a pair, and in stockings a drop from 7s 6d to 4s lid. In dress materials the reduction is estimated to bo about 30 per cent., although several firm? are selling certain lines of high-quality goods at half their original price. One special instance mentioned was that of a line of cloth which had cost 17s 6d a yard, now being sold at 10s 6d. The reduction in men's clothing will without doubt be hailed with a sigh of relief by the man to whom in the last few years drapery bills have been eom thins; in the nature of a nightmare. Practically every article he requires is now cheaper. Ready-made suits'" which cost £7 10s can now be had for about £6; overcoats selling at £8 last winter are now a coup'e of guineas less, while instead of paying 30s for a felt hat, he can buy one for £1 or thereabouts.

One business man, discussing future possibilities, said:—"Prices will never go back to pre-war level, but it is expected they will remain at somewhere about 100 per cent, above, although the high prices of the war years are not at all likely to return." Another merchant, referring to the present position in Auckland, said : — ( " Many English stocks are to-day being' offered much below the present cost of replacement, so that at the first signs of renewed buying, prices will probably harden. Again, many of the sweeping reductions, some as high as 50 per cent., which are now taking place in the drapery trade in Auckland, are not a true indication of the position, oeing special lines purchased under special conditions, such as over-im-portation and financial stress. This must be borne in mind when instances of these heavy reductions are cited. The prices do not represent value, and when goods are being so'd at under cost of production, it is impossible to say that such prices will last." " Although .satisfactory to the public, the present position is a serious one "for the trade," remarked another representative of the trade, in summing up the situation. " There will be no profits this year for most of the wholesale and retail concerns, arid they will be fortunate if they get off without serious loss of capital. Many people think that large concerns can .well afford to meet their as they have made so much profit during the war period. This is not strictly correct, as taxation has taken practically 10s in every £ of net profit. _ The breaking point is quickly approaching, and unless there is some relief from high taxation and reduction in overhead charges. I am afraid there will be a great deal of unemployment ahead."