25 January 2007

Save small shops by shopping there

One of the major largely unchallenged themes in the UK media at the moment is the “plight of small shops”. You see apparently it is bad that 75% of shopping is undertaken at four large supermarket chains (this is called a monopoly? Has anyone read the definition), with the rest at small independently owned stores.
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A rather peculiar middle class concern is that these big chains, such as Tesco are soulless, offer less variety and “do harm” to shops that people no longer use because they prefer Tesco. A weirder concern is that these big chains have substantial buying power from food producers, so demand ever lower prices from them – because, apparently, consumers don’t matter in this. Another accusation is that they buy tracts of land suitable for shops and don’t use them, to shut out the competition. Follow it so far? Well it is like this:
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- Most of the time people choose to shop at big supermarkets, presumably because they are convenient, have the varieties people want and are cheap (one family asked by the BBC to try shopping at local independent stores instead of supermarkets/mega stores described how it took far longer to go to the independent stores, how the variety was often inferior and the prices far higher). So in essence people are voting with their feet and wallets, most of the time they don’t want to spend their money at independent stores:
- Independent store owners don’t like this, so they pull at the nostalgia strings of peoples’ hearts accusing big stores of being ugly (sometimes true), and how “important it is” (to the shop owners) to have high streets with lots of varieties of stores, and that it is “a pity” (to the shop owners) for these shops to close down;
- Independent store owners which cannot attract enough business accuse big stores than can attract enough business of acting “unfairly” somehow. These accusations largely focus on being “too cheap” (for the competing shops) and by teaming up with suppliers who undoubtedly prefer being paid more by many small shop owners (because the supplier can be the price setter rather than the buyer);
- Small minded politicians of all political creeds jump on this bandwagon on nostalgia grounds, demanding something be done.
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The answer is simple. If you like small shops in your area, ask yourself when was the last time you actually bought something there and how much was it? If you don’t support the shop, it wont remain and don’t expect everyone else who doesn’t see value in spending THEIR money at the shop to pay for it. After all, why should a family pay more for food and clothes at small stores just because you like the store existing?
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There is a competition body investigation into this, remember we are talking about four major chains shutting out competition - not one, and there is still plenty of choice. Within 15 minutes of my flat I can choose between three supermarkets (one independent) and umpteen convenience stores.
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David Cameron supports this stupid campaign – don’t be surprised, it appeals to the upper class conservative who thinks that working class people shopping in malls is “vulgar” and doesn’t care that people on low incomes demand convenience and low prices over boutique stores with personal service. It also appeals to the socialist who hates businesses being so successful that they become franchises and more and more people use them. After all, we can't simply let businesses rise or fall on the basis of what consumers want can we??

Jenny Gibbs can't get broadband?

*heart wails with agony* Who gives a flying f***?
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As a friend of Tame Iti, and someone who hardly share the enthusiasm for the free-market and entrepreneurism of her ex.husband, why should Telecom give a damn? After all it has to offer its property to competitors, so why invest in more capacity so the competition can use it?
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Gibbs said "When I see the amount of money they are spending on advertising without putting it into infrastructure I do think it is a bit outrageous"
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Raise it at the AGM Jenny if you still have shares, if that fails then frankly when I see the amount of money YOU spend on tasteless art and travel without putting it into free market publications and media, I do think it is a bit outrageous.
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Set up your own little network, you can afford it after all - stop telling others what to do with their property.

Kerry for Mayor of Wellington?

I can’t get too enthused, although she’s better than some it would be nicer if she could campaign on at least capping the overall rates take. So I’m looking for another mayoral candidate, one committed to less council and lower rates (especially for commercial properties, to attract business to the capital rather than relying on the state sector). It would be nice to see the council sell its minority share in Wellington Airport too, to help ease the debt burden (and consequently the rates burden).
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Prendergast is almost certainly a shoo in, although there will almost certainly be some leftie luddite candidate wanting everyone else to pay for a whole host of schemes nobody would voluntarily fund – and the Greens will probably give that person covert support (surely not!!! Surely the left is transparent in all of the organisations it backs and with all of its members, like than honest Marxist Nicky Hagar). The Nats and ACT will quietly back Kerry of course, and she is enough to the centre that Labour wont waste its time opposing her. What is more important is the council, which is currently stuck in a 50/50 left/right balance.
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So who could stand for Mayor? Maybe a young man who took the Prime Minister to court might have a shot?
PS: Blogging is erratic at the moment while I await 10 days for broadband to be installed at home, having waited 10 days for the phone line to be fixed. Of course there has been local loop unbundling here for years, so this first class service will be the norm in NZ shortly!!!

23 January 2007

Well that's over

The wholly predictable expulsion of Jade Goody from the Celebrity Big Brother household has happened, and the drama of it is fading away. She was expelled, did not face booing crowds for security reasons, has been bawling her eyes out on TV a couple of times, and has now disappeared.
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Now Celebrity Big Brother if it is lucky will last its final week as the almost entirely boring crowd deliver next to nothing in entertainment for viewers. Hopefully the truly braindead Jack Tweed (apparently male model, training to be a footballer's agent, though frankly I'm surprised if he can do up his shoelace) will be gone next, with Jo from S Club 7 and Danielle Lloyd (pretty girl apparently has lost her footballing boyfriend for her racist remarks). Then we have the quiet sweet but thoroughly uninteresting Jermaine Jackson, Dirk Benedict who flirts with women but can't stand them flirting back, Ian from Steps (yeah I know), Cleo Rocos (who was one in love with Kenny Everett, who was of course gay, and who has sufficient personality for her real job as TV and radio personality). There is Shilpa of course who will probably win anyway.
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Seriously the issue now is Channel 4's future. The papers in the weekend reported on the indirect subsidy it gets because unlike the other commercial channels, it doesn't have to pay for its broadcast frequencies (ITV and Five do), and as it does pay for its digital channels there are questions about how it will survive longer term to meet its public service obligations.
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Given that the BBC exists, I think it should simply be privatised. Channel 4's main public service endeavours tend to consist of shows about sexually explicit topics. Partial as I am to some of these, it doesn't justify keeping it state owned. It is a commercial channel, it acts like a commercial channels, looks like a commercial channel - it should be sold.

20 January 2007

Fly more domestically

So Air NZ is slashing domestic fares by up to 26%. It is like another leap downwards from when it dropped all frills with "Express Class" a few years ago. Most people will cheer, but I am sure around 5% will bemoan that this will mean more global warming - though few of those will stop flying because it "isn't convenient" and no doubt their flights are terribly important.
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Air NZ is engaging in a two pronged strategy:
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1. Stimulating a next level growth in air travel, to grow the business. It already has quite a profitable operation domestically, but there are economies of scale to exploit and its own research has indicated that people would fly more often if it was cheaper. Some people still drive long distances and this is designed to get them to fly instead, but more importantly people can take MORE trips more often. The flow on effects to the business sector are considerable too - this is called a positive externality.
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2. Warn away further competition. Qantas's dropping of Wellington-Christchurch and the collapse of Origin Pacific Airways have helped Air NZ a great deal. This also is about showing to Pacific/Virgin Blue that the NZ domestic market is not easy pickings, and helps to emphasise Qantas keeping a relatively small scale operation on the two routes it operates.
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"but what about emissions" I hear in the background, as the Greens clamour for a bill to freeze the amount of aviation emissions, I am sure they will support this as long as there are no more flights. However, there WILL be more flights. That is not a bad thing either. More flights mean businesspeople can do more business, trade more and there is more room for time sensitive domestic air cargo. It also has major social benefits, with families and friends being able to meet more often. These are not social benefits paid for by taxpayers, but by those buying airfares. It will be easier to hold conferences anywhere in the country, and will do a damned sight more for regional development than anything Jim Anderton or the Ministry of Economic Development does.
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This is a far cry from the bad old days, when Air NZ had a statutory monopoly on domestic routes (except routes that it didn' t want to fly), was 100% state owned and lost money on all routes except the Auckland-Wellington-Christchurch "main trunk". Ironically Richard Prebble of all people voted against removing the statutory monopoly in 1983 (but redeemed himself by raising the foreign ownership limits on domestic airlines to 50% a few years later to let Ansett NZ become established). The cost of domestic air travel back then was in today's terms around 2.5 times what it is now. NZ has one of the most open domestic airline markets in the world in that 100% foreign owned airlines can operate freely - this is unlike Australia and the US, and is only paralleled by the EU (but this only applies to EU airlines). The threat of competition is clearly very very good for NZ consumers. Now which political party would turn the clock back?