Its funny how the market adjusts instantly when prices go up
In economics, nominal rigidity, also referred to as price stickiness or wage stickiness, describes a situation in which a nominal price is slow to adjust or resistant to change.
There is a strong incentive to raise prices when the cost of inputs goes up (because otherwise you operate at a loss). But a weak incentive to lower prices when the cost of inputs goes down (because gasoline is an inelastic good).
If it makes you feel any better, wages are the ur-example of nominal rigidity for a reason. Delivering a pay cut to employees is practically impossible. People hate that shit and will immediately start sabotaging business productivity in response, then leave at the first lukewarm opportunity, resulting in a net-negative long term return for the employer.
The optimal response to price stickiness is to jettison the source of the cost. In the case of labor, this means layoffs (people get angry at a wage cut but feel comparatively relieves when they end up with more work at the same pay scale because their coworkers got fired). In the case of vehicles, this typically means transitioning to EVs or adopting public transit.
To add: inflation is an automatic yearly pay cut. Your wage will grow much faster by switching jobs than it will by raises.
Finally, a benefit of being way below the poverty line in my late teens/early 20s. Couldn’t afford to drive so petrol prices don’t matter to me!
High energy prices will increase the price of everything. Even if you don’t drive, you buy things which are transported to you and probably include petroleum in their manufacturing process.
Sounds like a good reason to use fuel on massive truck deliveries instead of individual transportation.
A personal vehicle has a tare of ~2,000kg to move ~80kg of human. So <5% of the engine output is moving cargo.
A transport has a tare ~13,000 kg to move ~22,000 kg of stuff So ~40% of the engine output is moving cargo.
A city bus has a tare of ~12000 kg to move ~5000kg of human and stuff. So about ~30% of the engine output is moving cargo.
My bike gets some crazy efficiency using this method! At least it does until I strap on my 2x35L bags on it.
When is that going to happen though? Not really noticed much change, my weekly Aldi shop still costs under £15 each.
soon, because the food you get in grocery stores is farmed via equipment that uses lots of diesel. it’s sadly a very safe prediction to make.
I’d like to direct your attention here
Honestly still haven’t seen any real difference shopping at Aldi in the UK. Food is still cheap enough that it may as well be a rounding error on our monthly budget. The only thing cheaper is water.
Well, that’s good. Even if it is 44% annualized or whatever the article said, that only means like 4% in a month. For your 15 bill that’s like 0.50
Ah, so the article is intentionally misleading by using a single months data as if it represents a whole year. Also April is the start of a new financial year so not exactly unsurprising to see it being higher for price increases.
Well, yes and no. I see how the figure can be confusing and misunderstood. A nearly 4% price increase usually happens over the course of a year or two and it has happened in a single month, which is the point of the article.
They should because high gaz prices means everything is more expensive since everything is shipped by truck or boat.
Maybe eventually, but so far nothing has really changed. Aldi still costs us under £15 each for a week of food and that is without even putting real effort into keeping prices down.
If I needed to cut prices down I would probably eat more oats/rice and less cheese. Also fuel is only part of transport costs, even if fuel price doubled the maintenance and staff wages wouldn’t.
I have to say I’m impressed with your 15 quid budget. Mind share the kind of basket that gets?
Varies of course but frequently buy: Potatoes, carrots, peppers, onions, lettuce, kidney beans, tortillas, bread, chicken, cheese.
Somewhat less frequently as it lasts more than a week or I buy a bunch at a time: Flour, tomato puree, spicy/bbq sauces, soy sauce, rice, pasta, chopped tomatoes, chickpeas, oats
At least it fall. When is the last time you see a restaurant decrease the price after they increase it when in some random crisis period?
I’m a hell of a lot more sympathetic to a privately owned local restaurant employing people in my neighborhood and using that profit in my local economy than I am an oil company, though
Denny’s eggs
Prices never fall as quickly as that
