In search of a better deal

The time to buy 'big ticket' items is not quite here, says Ashley Balls, our prices are still way too high, and he has the evidence.

fhen your dishwasher, oven and garbage disposal unit all decide to "die' in the same week it is time to start thinking about spending some money. Add in the car being due for replacement and an expensive time beckons for this household.

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Being an avid seeker of a 'deal', some net surfing produced some interesting results. Given that GST is set to go up in October, and the NZ Dollar is close to all time highs against many of our trading partners the prospects for a bargain looked pretty good. How wrong could I be?

Spending hours on the web trying to compare like with like has been a mission but one thing is remarkably clear; if you are in the market for European whitegoods or a mid-range two litre European car, New Zealand retail is not looking that flash. Set out below are some comparisons taken on 26th May when the exchange rate (in round figures) was NZ$1 = 锟?.47p. Before any 'garagistes' and/or white-goods resellers climb out of their prams and say I am being unfair and that New Zealand cars have a higher 'spec' than Europe, or white-goods are special offers, the answer is NO. All prices quoted are retail BUT the European car market has moved on. Private purchasers of new cars are now buying online at car supermarkets which offer big discounts on pretty much everything, even a new Bentley. There Platform pumps is no equivalent of the LMVD in the EU, where buying and selling cars is just another business - not an exclusive club providing a licence to operate a closed shop.

See table above for a few of the products/prices researched. All figures include sales taxes at the current rate which makes the differential even larger. The sales tax position is that the current rate of GST in New Zealand is 12.5 percent and its UK equivalent is 17.5 percent. Price differentials can be explained to some extent by the small size of the New Zealand market, the cost of freight, the necessity of hedging foreign exchange and buying currency at the 'wrong' time/price. However, even when taking all these into account the differentials are less than flattering to the local resellers. For reference, the UK car prices include ORC. one year registration equivalent and delivery to any mainland UK address. Full manufacturer's warranty/guarantees are included. The supplier used is AutoEBid () and the white-goods retailer is John Lewis and the prices are everyday - not special offers. I have no doubts that the New Zealand prices can be bettered with some haggling but closing gaps this large is simply not on. It looks as though UK retail is below New Zealand wholesale and by quite a margin.

The above products were chosen randomly. Looking further was revealing and clearly shows that at the entry level New Zealand still represents good value for most products, though local supermarket prices are still significantly higher for a basket of family groceries.

It would appear that going up the quality curve is where price gouging (if that is what it is) starts. Clothing is a good example. Quality merino knitwear prices are a 'joke' and are far higher than even cashmere in the EU. Quality footwear is another example: New Zealand cheap is really cheap but mid-range men's and women's shoes and virtually all quality clothing can be bought cheaper off-shore. The web would appear to be the primary reason as it dramatically reduces the cost of sales and many foreign businesses are passing on some of the savings.

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