The dilemma of trade in the face of inflation: "I dare not raise prices any further. We are the ones who show our faces"

Hello, Paco and Rafa are three veteran merchants, leading their businesses for decades.

Lola runs a bar, Paco sells clothes and Rafa, electrical appliances.

The three, in their respective sectors, have suffered for a year from an escalation of costs that they had not experienced before, which

Despite the fact that all three have loyal customers, "it is difficult to explain to the customer that you are raising prices," says Paco.

And that they are not rising so much

s prices as the costs they suffer.

Paco, who has two men's clothing stores, one of them in a shopping center in Torrejón de Ardoz, near Madrid, lists the extra costs that he has been assuming these months.

He says that, for example, the electricity has risen by 60%.

He used to pay a bill of 50 euros and now he receives 130-140 euros every month.

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«Although my client is very loyal to the brand, if I reflect everything that the costs have increased in the final price, they would not buy me.

I can pass on only a small part, so if before I earned 10 now my benefit has remained at three.

The other seven have fallen by the wayside », he explains.

There's a

or the customer for the products they sell or offer (the famous margin), so they earn less money than before, still selling the same thing.

In addition, both hospitality and commerce come from two years of crisis, the one caused by Covid, in which they have suffered restrictions on their activity, to prevent the pandemic from spreading.

uploads

Lola has raised the beer, Paco the price of men's shirts and

And there "you can no longer continue raising everything that costs you."

Lola recalls that commerce and hospitality “we are sectors that face up to the final consumer.

You negotiate with the salesperson, the factory... But we are the ones who have to explain to the customer why there are products that have risen twice as much," says this businesswoman who has been running Los Gatos for 40 years, a "castiza tavern" in the central area of ​​Madrid «where the parishioners on duty come.

The parents came and now the children.

She is loyal clientele », she explains.

«When you work in a small company and you are very close to the public, in the end they are friends and

»adds the businesswoman.

I hate raising prices and I hate changing the menu.

", the Mint.

For example, changing suppliers, because the product has risen so much that it is not worth it. She has spent decades with her suppliers, buys gourmet products and "it is a matter of survival, of fighting to continue having the same product, and not lower the price." quality".

Even so, "there are many things that you cannot upload."

The rise in costs is like a domino effect: if the raw material rises (cereal, for example), the product sells more expensive to the manufacturer, which in turn sells more expensive to the distributor.

Lola explains that

, other providers (who have also made their services more expensive) have told him that it is because the retail price is very low.

Lola replies, "I don't dare raise the prices any higher."

BALANCING ACT

“We survived by juggling on the wire.

If this goes on, it will be impossible to survive," says Cevilio, who recalls that, although much has been said about the energy bill, the problem "is that this is only one item, but if you sell many items and each one costs you more, three cents for each one is a lot”, says the businessman.

Lola does admit that "it is the first time that

.

See that it is not a whim.

People understand why things have to go up."

Rafa agrees that "people are already aware, there is no resistance."

People, they all agree, are not stopping consuming or buying, but they have changed their habits: "They have not stopped coming to the bar, but they consume less," says Lola.

Rafa explains that something less is being sold, at least in her case, "she is opting more for repairs, instead of changing the refrigerator, which used to compensate, now you fix it and wait."

This businessman also explains that they are now opening up the range of extra services they offer.

They not only sell washing machines or televisions, but now they also offer insurance, guarantees... «

, explains the businessman.

They are also beginning to charge for services that were previously free, such as installation or delivery.

"People assume it, they understand that they have to collect it," he points out.

They all agree that the cost control they have is much stricter.

The budgets "are much more detailed and measured," says Rafa, who also says that they have less stock.

If before they had 20 washing machines in stock, now, for example, they only have 10.

picaresque

In this inflationary crisis there is also a lot of picaresque.

As Lola says, "

», he says in reference to the practice of selling a product at the same price but with less quantity, so that the same is paid, but for less.

Lola tells the case of a company that not only reduced the amount of product, but also contained the container, but also enlarged it.

«

I had been working with this house for many years, it is a gourmet product.

There are many companies that play to confuse », she protests.

The three merchants have all their hopes pinned on this Christmas campaign, which is usually one of the times with the most sales, especially for the textile and hospitality sectors (except for household appliances).

Lola acknowledges that if this continues like this “there will be no choice but to go up to the corner.

At Christmas I resist doing it ».

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