APT Initiatives
APT Business & Economics Resources
Minimising Workloads, Maximising Performance
Established in 1999

Categories
Information
Special Items

Budget retailers

Businesses (who buy from wholesalers or direct from producers) that sell inexpensive goods or services for sale to the public in shops or other retail outlets. See retailer. Such businesses often experience a growth in sales and market share during economic downturns. Economics would explain the shift to the low cost supplier in terms of income elasticity of demand. See income elasticity of demand. Falling incomes is a characteristic of recessions and a reduction in incomes is likely to result in a reduction in demand. The reduction is expected to be greatest at the luxury end of the market and lowest at the basic necessities end of the market. But, there is a class of goods for which demand actually rises as incomes fall. Economists call these goods ‘inferior goods’, a term which the suppliers concerned might find objectionable. However, by inferior we do not mean shoddy or substandard. Inferior goods in economics simply means goods for which there is a superior alternative. As incomes rise, people, switch to the superior alternative. As incomes fall (or where there is a fear of redundancy leading to expectations of a future fall in income) people switch to the cheaper alternative. For this category of goods and suppliers, income elasticity of demand is negative – that is, income and demand move in the opposite direction. The rise in budget retailers has also been explained by many writers on the subject as a result of a shift in attitudes and shopping habits in recent years, namely that more and more people look to save money and are feel a great sense of satisfaction and some even a sense of pride in finding a bargain.

Millstone Lodge, Eaton Upon Tern, Market Drayton, Shropshire, TF9 2BX - Tel : 01952 540877 - Fax : 01952 541230
Registered in England no.: 5211217 VAT Number: 815750626
www.apt-initiatives.com - sales@apt-initiatives.com | © Copyright 2008 - APT Initiatives Ltd

terms & conditions | sitemap

Valid HTML 4.01 Transitional Valid CSS!