Strong Baht Yet Retail Prices Still Rise

[Aujuba]

The baht has been strong for a few months anyways and yet the prices at the chain shops still seem high. The UFM bakery raised its prices recently. It seems like 7Eleven prices are higher. Shouldn't prices go down if Thai money can buy more for less abroad? Just curious why things aren't cheaper.

[soundman]

The baht has been strong for a few months anyways and yet the prices at the chain shops still seem high. The UFM bakery raised its prices recently. It seems like 7Eleven prices are higher. Shouldn't prices go down if Thai money can buy more for less abroad? Just curious why things aren't cheaper.

They should, but as with a lot of major corporations, retail pricing rarely reflects the actual cost of the product. It usely reflects the maximum customers in a given demo-graphic are willing to pay before they stop buying the item.

If it was a direct apple for apple comparisson with ten importers stocking the same item it still may make no difference as to the retail price. Who's to say that the ten importers aren't all meeting each other & discussing pricing & marketing srategies as to how they can all maximise their profits rather than having a price war & no profits for anybody.

Unfortunately big business is much smarter than the consumer, & purchasing, product exclusivety (limited monoploly), pricing & marketing is all about a maximum profit margin that is calculated as a product of two opposing curves. Maximum price versus maximum sales.

Cheers,

Soundman.

[bendix]

Well. for a start, most of the items in the shops you're talking about - a 7-11 and a bakery - wouldnt be sourced overseas. They'd be produced locally, so the strong baht would have no impact on them at all.

As for imported goods, yes in theory but it doesnt always work out that way. Prices tend to be the maximum a retailer or wholesaler thinks the local market will bear .. nothing to do with supply prices. As it is, the profits will simply increase while supply prices are lower.

[jdinasia]

Welcome to inflation....

Cost of petrol goes up .... then the costs of almost everything goes up etc etc .....

but even for imported goods you have to look at where they are sourcing the ingredients etc

[ludosiam]

The baht has been strong for a few months anyways and yet the prices at the chain shops still seem high. The UFM bakery raised its prices recently. It seems like 7Eleven prices are higher. Shouldn't prices go down if Thai money can buy more for less abroad? Just curious why things aren't cheaper.

Wonder about that myself, specially the fuel prices should have gone down as the sales price is in USD and the baht has appreciated a lot against USD, yet the fuel prices have in fact increased. Everytime the crude oil price goes up,. the prices at pumps stations are up as well, yet when the Baht is getting stronger no reaction on the market.

[cclub75]

Wonder about that myself, specially the fuel prices should have gone down as the sales price is in USD and the baht has appreciated a lot against USD, yet the fuel prices have in fact increased. Everytime the crude oil price goes up,. the prices at pumps stations are up as well, yet when the Baht is getting stronger no reaction on the market.

Nope. Because our Ex Great Leader, Thaksin, did whatever he could while in office to subsizide gasoline. In 1 year, this program created a debt of almost 100 billions THB...

Therefore, now you are paying... back the debt.

Therefore, even if THB is going up against USD, or price of crude oil is going down... thai consummers will continue for a while time to enjoy a "premium" per liter.

Like many other things in Thailand... gasoline is political.

PTT, albeit quoted on the public stock exchange, is always proud to announce a delay before to increase its prices after a hike in crude oil price, therefore a decrease of its margin !

Same with electricity, for which the gvt is pushing the brake like crazy in order to prevent an increase.

Instead of having a real policy to reduce energy consumption... The wake up call could be painfull.

[Aujuba]

It guess it makes sense that they are getting what they can but that also must mean that people have money to spend and the economy is doing well. Some have said that gas prices will eventually affect world prices - inflation etc. I don't really understand all that stuff. But it makes sense that if gas prices are going to affect the US then why shouldn't they have influence here. As for products being made locally. I'm sure that some are but some of the products use stuff from abroad like the wheat in the bakery products etc. I'm not sure if the soft drink producers use local corn syrups or not.

Thanks for the info!