BUSINESS MONDAY: 'DON'T RAISE PRICES'

GOVERNOR of the Central Bank of Barbados, Cleviston Haynes, is begging retailers and other businesses not to increase the mark-ups they apply on goods to consumers.

Higher mark-ups mean the cost of goods will increase, and according to the Governor, the Central Bank continues to hear the complaints of people about high prices.

He made the appeal while responding to a media query about the rising consumer prices Barbadians have been paying for goods and services.

Saying the Bank has to monitor prices, the Governor told the media that there are a couple of factors influencing high prices, among them being imported prices as well as the mark-ups.

On the question of imported prices, the Central Bank's top economist revealed that obviously firms in Barbados need to recover from those prices they are paying for the foreign items.

As for mark-ups however, the Governor said: "What we would want is that firms not seek to raise their mark-ups during this difficult period. It is not really in the interest of firms to do that as where persons have diminished incomes, they are not going to buy a lot of items.

"So in some cases you need to lower those mark-ups," he advised while acknowledging that in recent months, companies have turned to offer sales in an attempt to move some of their stock.

According to Haynes, if there is not sufficient demand for items, then retailers and other businesses have to find alternative mechanisms to move their stock. One such approach, he explained, is to offer sales.   

Complaints about high prices in Barbados come in the wake of charges that some items have been reduced in sizes, although there is no corresponding reduction in costs. The complaints also come against the background of the removal of the National Social Responsibility Levy (NSRL), which was touted as the culprit for higher prices to consumers.

The Governor pointed out that while imported prices had increased, there has been some volatility in local produce resulting in the upward price movement. He referred as well to comments made recently by James Paul of the Barbados Agricultural Society that with rainfall affecting some domestic crops, prices could also be increased.

Haynes stated that on a point-to-point basis between September last year and September this year, prices decreased by 0.5 per cent. However, the moving average was a lot higher at four per cent, although that included items measured from before September this year.

"So at this time I would not get too alarmed [about] price increases," he added.