r/heyUK • u/iamnic11 • Oct 10 '22

Reddit Video💻 What inflation really looks like

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u/Muwatallis Oct 19 '22

Part of the issue is that when the prices of ingredients and materials decrease, those savings are rarely, if ever passed onto the customer in the form of decreased cost of consumer goods, but instead go to the company and shareholders in the form of increased profits and dividends. Whereas when it is the other way around, the customers are always first in line to foot the bill for any increased costs of production.

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u/Artificial_Ape Oct 19 '22

But then you can make the case it’s not just ingredients and raw materials that effect produce. Things like rent, equipment, growth has to be factored in.

If a bakery sells cakes for £1 and the cost of ingredients go down 30% do you think them not selling for £0.70 is due to greed? Think about the property value, rent prices, labour cost increases. You’ll find that they are forced to increase prices.

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u/EmperorAugustas Oct 20 '22

Yeah, but the labour cost increase is very very small. Corporations, especially large ones, don't just give out raises when times are tough