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Cost Cutting (can) mean bad business sense?

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Created by Dazza65 > 9 months ago, 17 Jun 2011
Dazza65
QLD, 389 posts
17 Jun 2011 3:53PM
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Just want to know if anyone else out there has noticed that with a tougher than normal business climate of instances where a retailer/small business through cost cutting will inadvertenly turn away customers.
The instance I just witnessed was where my wife decided she wanted an icecream from a retailer (major chain) we have frequented many times in the past. My wife asked for her regular one scoop in a cup which is normally fair in proportion but on this occasion the young lass behind the counter put in about half the usual icecream and then proceeded to a set of scales to weigh it!!!...WTF?? obviously some so-called smart bean counter has crunched some numbers to work out that if you reduce the amount of icecream but charge the same price your cost of goods sold figures look better? We were both stunned and hence wont be going back there again, two of probably many lost customers!
Depending on the level of cost saving vs reduced sales this will undoubtedly have an effect on profit. I know right now its real tough times out there for retailers and small business but you have to think customers are your lifeline and doing anything that may turn them away is business suicide.

doggie
WA, 15849 posts
17 Jun 2011 2:06PM
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If you think that light switches in modern houses are low so kids can reach them you are mistaken.

They are that low so sparkies can use less wire and charge the same amount.

Chris6791
WA, 3271 posts
17 Jun 2011 2:11PM
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Don't assume its cost cutting. Most major food retailers have incredibly specific portion control for the ingredients in their shakes, burgers, pizzas, fries etc, Maccas, HJ's, Pizza Hut, Boost, you name it they all do it, whether they use scales or measuring cups. Next time you get a Boost Juice look over the screen at the scales.

It could be they were training a new girl and she hasn't learnt to reliably portion out a scoop of ice-cream yet or food costs were getting out of control due to over-portioning and the boss is getting them back to basics?

But yes it could also be they have shrunk the portions to trim costs as well...

When I worked for Eagle Boys many years ago they were one of the first of the big pizza chains to drop the size of their large pizzas from I think it was a 14 inch diameter 13 ( about 13-14 years ago), not a single customer ever mentioned it (they shrunk the box at the same time so it was harder to notice). Yet a year or two ago they happily gobbed off in their advertising they weren't shrinking their pizza like the competitiors were doing at the time.

Dazza65
QLD, 389 posts
17 Jun 2011 4:12PM
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I forgot about when a certain brand of beer (cant recall) reduced the size of their bottles to 330ml but charged the same amount hoping no one would notice! Demand for beer is inelastic in my books so wouldnt have mattered to me but still....consumer rip off?

Sailhack
VIC, 5000 posts
17 Jun 2011 4:25PM
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Chris6791 said...

Don't assume its cost cutting. Most major food retailers have incredibly specific portion control for the ingredients in their shakes, burgers, pizzas, fries etc, Maccas, HJ's, Pizza Hut, Boost, you name it they all do it, whether they use scales or measuring cups. Next time you get a Boost Juice look over the screen at the scales.


Sister-in-law managed Subway for a couple of years...I was amazed at the level of accuracy and reporting she has to do re; portion sizes. If the numbers don't stack up, the franchise owner has to answer to the Subway directors in USA.

As for stubbie sizes - I remember when spirits went from 750ml to 700ml, no price drop, Cadbury chocky - did the same and ACA tried to make a big deal out of it. Sign of the times, and what's needed I guess to keep up profits & stay competitive? Unfortunately, my daily intake doesn't go on cost comparison, but on volume comparison!

Gizmo
SA, 2865 posts
17 Jun 2011 5:55PM
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doggie said...

If you think that light switches in modern houses are low so kids can reach them you are mistaken.

They are that low so sparkies can use less wire and charge the same amount.


???? if the switch was lower it takes MORE cable up the wall and across to the light.
When I had a house built years ago the electrician wanted extra for wiring double power points rather than singles..... (same for installation) After a few choice words from me, installed for the same price!

62mac
WA, 24860 posts
17 Jun 2011 4:43PM
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Dazza65 said...

I forgot about when a certain brand of beer (cant recall) reduced the size of their bottles to 330ml but charged the same amount hoping no one would notice! Demand for beer is inelastic in my books so wouldnt have mattered to me but still....consumer rip off?


Look at Bundy Rum,a few years ago they went from 750 to 700 mill's.
Cutbacks hmm,some manufactures make the mistake of cutting sales staff
when things are slow.
The key to good customer service is hire the BEST people you can find.
Cutbacks gezz my local servo has lost me of late,the last two times I've
gone for the gas drop and go only to be told sorry only one staff member
come back another time,too easy I go to the next servo with only one person
on duty and he gives me the key's to self serve.
Pizza Hut don't dare to ask for more than one extra topping,they won't do it WTF
what sort of service is that.

doggie
WA, 15849 posts
17 Jun 2011 4:46PM
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Gizmo said...

doggie said...

If you think that light switches in modern houses are low so kids can reach them you are mistaken.

They are that low so sparkies can use less wire and charge the same amount.


???? if the switch was lower it takes MORE cable up the wall and across to the light.
When I had a house built years ago the electrician wanted extra for wiring double power points rather than singles..... (same for installation) After a few choice words from me, installed for the same price!


My Dad is/was an sparki, dunno how many times he told me that, his house was built in 1971 and all the light switches were around shpulder height I guess and the house that I live in is older 1920s I think and the switches are all shoulder height. New houses 1975>> are all waist height. Im going to see Dad this weekend and I will ask him btw Im not a sparky..

bjw
QLD, 3691 posts
17 Jun 2011 7:23PM
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A small shop in westfield pays min 100g per annum in rent and that rises usual CPI+3pct (6%).

Food prices have increased massively. (15%)+

Electricity prices have doubled in 5 years.

Minimum wage has shot up of the back of a change in government.

Yet we still pay 7 bucks for a burger combo?

Complaining?



Things could get scary with this new tax.

Or how much smaller can that ice cream get? How much more soy can they fit in that maccas pattie?


laurie
NSW, 3904 posts
17 Jun 2011 7:48PM
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doggie said...

If you think that light switches in modern houses are low so kids can reach them you are mistaken.

They are that low so sparkies can use less wire and charge the same amount.


Pretty sure on new houses the wire comes from the roof, not the floor, so lower = more wire, more cutting in?

doggie
WA, 15849 posts
17 Jun 2011 5:58PM
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laurie said...

doggie said...

If you think that light switches in modern houses are low so kids can reach them you are mistaken.

They are that low so sparkies can use less wire and charge the same amount.


Pretty sure on new houses the wire comes from the roof, not the floor, so lower = more wire, more cutting in?


Dunno mate will check with the old fella on the weekend, you maybe right, I may be crazy

Little Jon
NSW, 2115 posts
17 Jun 2011 10:15PM
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bjw said...

A small shop in westfield pays min 100g per annum in rent and that rises usual CPI+3pct (6%).

Food prices have increased massively. (15%)+

Electricity prices have doubled in 5 years.

Minimum wage has shot up of the back of a change in government.

Yet we still pay 7 bucks for a burger combo?

Complaining?



Things could get scary with this new tax.

Or how much smaller can that ice cream get? How much more soy can they fit in that maccas pattie?


increased wages is a good thing, gets the economy going

food goes up with fuel and supply Vs demand

a tax on someone else means less tax on me and that's what everyone really thinks but don't like to admit.

Simondo
VIC, 8025 posts
17 Jun 2011 10:24PM
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Yep, you're crazy Doggie ! Mostly wired in the ceiling... Lighting in the ceiling... Wire from switch goes up to the lights ! But often, the main backbone cable runs are also in the ceiling.

Little Jon
NSW, 2115 posts
17 Jun 2011 10:24PM
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oh yeah and its not soy in your maccas burger its 100% beef, like scrotums, annus and noses. My nephew works at a country auction house and says maccas buy all the old bulls because they're cheaper.

Which reminds me of a joke... why does Micheal Jackson like mcdonalds? Old meat in fresh buns

FormulaNova
WA, 15109 posts
17 Jun 2011 9:07PM
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Gizmo said...

doggie said...

If you think that light switches in modern houses are low so kids can reach them you are mistaken.

They are that low so sparkies can use less wire and charge the same amount.


???? if the switch was lower it takes MORE cable up the wall and across to the light.
When I had a house built years ago the electrician wanted extra for wiring double power points rather than singles..... (same for installation) After a few choice words from me, installed for the same price!


That's classic! You should have gone with the singles and he could have been finished in half the time

My brother's an electrician and he never seems to be worried about the copper that they waste.

Hopefully they are wiring light switches in newer houses lower in order to make it more suitable for 'adaptable housing'. In other words, so you can reach them from a wheelchair as you get older.

FormulaNova
WA, 15109 posts
17 Jun 2011 9:12PM
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I like watching Gordon Ramsay's Kitchen Nightmares, and it seems that a lot of places try and skimp on quality as the business slows down, and end up making it much worse.

I guess it must be hard to try to keep up quality if you think you are saving the business.

Little Jon
NSW, 2115 posts
17 Jun 2011 11:18PM
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Back to cost cutting being bad for business...I call it the quality cycle, they cut costs while things detoriate until its so bad they can't deny it any longer. Of course they can't admit this and need someone else to blame so sack some middle managment and staff. Then add more resources to fix it but it's not easy as "Humpdy Dynamics" have taken hold. Like the humpdy dumpty nursery rymne, humpty was an egg and you can't unscramble an egg no matter what resources you put in (all the king's horses and all the kings men). Eventually quality comes back up and the cycle starts again.

Humpty Dynamics is a managemnt theory I have developed inspired by Dilbert. I hope to run corporate seminars explaining this management theory and other corporate wank speak.

cisco
QLD, 12365 posts
18 Jun 2011 12:33AM
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doggie said...

Gizmo said...

doggie said...

If you think that light switches in modern houses are low so kids can reach them you are mistaken.

They are that low so sparkies can use less wire and charge the same amount.


???? if the switch was lower it takes MORE cable up the wall and across to the light.
When I had a house built years ago the electrician wanted extra for wiring double power points rather than singles..... (same for installation) After a few choice words from me, installed for the same price!


My Dad is/was an sparki, dunno how many times he told me that, his house was built in 1971 and all the light switches were around shpulder height I guess and the house that I live in is older 1920s I think and the switches are all shoulder height. New houses 1975>> are all waist height. Im going to see Dad this weekend and I will ask him btw Im not a sparky..


Normally the plumbing comes up from floor and wiring comes down from the roof.

cisco
QLD, 12365 posts
18 Jun 2011 12:36AM
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doggie said...
, you maybe right, I may be crazy


and you just might be the lunatic we're looking for,

bobdaboarder
NSW, 185 posts
18 Jun 2011 1:24AM
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cisco said...

doggie said...
, you maybe right, I may be crazy


and you just might be the lunatic we're looking for,




Above all sound like they would go good in a song

Jack Mack
NSW, 343 posts
18 Jun 2011 9:13AM
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NSW government
Public servant wages and condition issue.
New South Welshmen's services will be of
poorer quality.
Bad Business Sense!

Cassa
WA, 1305 posts
18 Jun 2011 9:42AM
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laurie said...

doggie said...

If you think that light switches in modern houses are low so kids can reach them you are mistaken.

They are that low so sparkies can use less wire and charge the same amount.


Pretty sure on new houses the wire comes from the roof, not the floor, so lower = more wire, more cutting in?


Correct, I build em every day

doggie
WA, 15849 posts
18 Jun 2011 9:54AM
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Cassa said...

laurie said...

doggie said...

If you think that light switches in modern houses are low so kids can reach them you are mistaken.

They are that low so sparkies can use less wire and charge the same amount.


Pretty sure on new houses the wire comes from the roof, not the floor, so lower = more wire, more cutting in?


Correct, I build em every day

Hey I wont argue

byf
WA, 518 posts
18 Jun 2011 10:07AM
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It may be wired from the floor in a kennel doggie

bjw
QLD, 3691 posts
18 Jun 2011 12:10PM
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Little Jon said...

oh yeah and its not soy in your maccas burger its 100% beef, like scrotums, annus and noses. My nephew works at a country auction house and says maccas buy all the old bulls because they're cheaper.

Which reminds me of a joke... why does Micheal Jackson like mcdonalds? Old meat in fresh buns


Its great wording, and they have been to court over the 100% Aussie Beef.

It doesn't mean they cant add soy, salt or corn to add volume to cost it effectively, they probably cant add pork into it though. Interesting about the old bull though. Fair is fair, I dont taste the diff so good on them.

Gizmo
SA, 2865 posts
18 Jun 2011 12:10PM
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bjw said...

Its great wording, and they have been to court over the 100% Aussie Beef.



I believe the wording of "100% Aussie Beef" means the meat they use comes from a company called "Australian Beef" or variations of that... and doesn't relate to the content of the burger.

http://www.search.asic.gov.au/gns001.html and enter Australian Beef for a name search

11 names come up...

AUSTRALIAN BEEF CO-OPERATIVE LTD
AUSTRALIAN BEEF COMPANY PTY. LIMITED
AUSTRALIAN BEEF ASSOCIATION LIMITED
AUSTRALIAN BEEF CORPORATION PTY LIMITED
NORTHERN AUSTRALIAN BEEF LIMITED
QUALITY AUSTRALIAN BEEF
AUSTRALIAN BEEF COMPOSITES
AUSTRALIAN BEEF INDUSTRY FOUNDATION LIMITED
AUSTRALIAN BEEF RESEARCH FOUNDATION PTY. LTD.
AUSTRALIAN BEEF PRODUCRES CO-OPERATIVE LTD
AUSTRALIAN BEEF PRODUCERS CO-OPERATIVE LTD



muna
WA, 136 posts
18 Jun 2011 4:22PM
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cost cutting at my workforce has caused job losses and training issues yet again what u expect from a multinational. In 2 yrs time visa workers or the local trolley pushers will be doing my job too lol

mineral1
WA, 4564 posts
18 Jun 2011 5:57PM
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Joondalup Local outlet for household item and the idiotic change of heart they threw at me last week.
Make a purchase, just over $3000. Talked them down a tad, normal haggle. Agreed on price.
Agreed on delivery price, to home and price to remove replaced household item. All good
However, short lived joy, when outlet calls, all excited saying "you item is here at shop Please come down and pay, so we can have it delivered. Discuss delivery date, and then the spanner in the works comes out from outlet rep. "Oh about the pick of old item, sorry, change of policy, we don't do that anymore" Discuss that this was agreed to in the sale, and if policy change, then policy should only take affect "after " all items sold under original policy agreement. But Noooo, no matter how hard I tried, rep wouldn't budge, just kept on about the "Policy change"
I asked him to discuss with is Manager, and call me back. He did some 10 minutes later, still no movement on "policy change"
Well my next trump card was to tell him, there was also a Policy change my end as well. " Any business electing to change policy mid purchase, would be removed from my allowable business outlets to use list. What's that mean he asked? Simple I said, you just lost a $3000 plus sale. The guy just blew a fuse. Started yelling at me over the phone saying I couldn't do that, we had an agreement. I calmly told him that soon as he was ready to revert to his original agreement, I would re -instate his Company back on my list and do business. [}:)]
He hasnt called yet

CJW
NSW, 1731 posts
18 Jun 2011 8:17PM
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^^ Nice one Mineral.

Funny one I noticed recently. I often buy these Honeycomb choc Muesli bars from one of the big two supermarkets. As we know they are having a bit of a price war atm and a while back I noticed they disappeared off the shelves for a few weeks. They reappear with the new slogan "NEW LOWER PRICE, miracles do happen I thought. Then upon closer inspection I noticed they had reduced the quantity from 12 to 8 bars...sneaky mother....new lower price indeed. Fast forward 4 months or so they are back to 12 bars again and the price is the same....so who knows wtf is going on.

landyacht
WA, 5921 posts
18 Jun 2011 10:26PM
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you have to love the "I will have to talk with my manager "line
once when haggling over a second hand car , the salemen told me , he would have to check with his manager and left the office.
whilst waiting for him , a salesman in the next office said to a customer on the phone"I will just check with my manager", put the caller on hold,and sat back smoked a ciggie, then picked up the phone and told the personthat his manager wouldnt allow him to reduce the price.
we got up and left the caryard..
so many salespeople just think they have to bull**** you to get the sale , but realistically , if they told the truth they would get a better sale

wormy
QLD, 679 posts
19 Jun 2011 10:24AM
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Select to expand quote
[Normally the plumbing comes up from floor and wiring comes down from the roof.




Wrong,
Plumbing and electrical all come from the ceiling.
Main lines run up a wall and across the ceiling with droppers down to each electrical/plumbing fixture.
I plumb them every day.



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Forums > General Discussion   Shooting the breeze...


"Cost Cutting (can) mean bad business sense?" started by Dazza65