How businesses can lower costs for consumers

Europeans have been hit by a cost-of-living crisis in a number of countries in the past year, with record levels of inflation driving up prices and squeezing household budgets.

Online streaming service Netflix is raising prices and Nokia is cutting about 14,000 jobs. Some big banks are also slashing jobs.

All of this creates a massive problem for households as they struggle to make ends meet. Between rising prices and job instability, there is little consumer confidence

Walmart said on Wednesday that it will "remove inflation" from Thanksgiving dinner by lowering prices on customers' favourite brands, while Aldi also said it would be lowering prices.

"Saving money remains a top priority for our customers, and this holiday season, we're building on the investments we made last year knowing they need it now more than ever," Walmart President and CEO John Furner said.

During times of inflation, businesses can employ various strategies to mitigate the impact on consumers by lowering prices.

One key approach is to focus on operational efficiency and cost reduction. Streamlining operations, optimising supply chains and negotiating better deals with suppliers can help reduce production costs, enabling businesses to pass on these savings to consumers.

Additionally, economies of scale can be achieved by increasing production volumes, which often result in lower per-unit production costs. Businesses often also invest in product innovation to develop cost-effective offerings without compromising quality.

Marketing efforts, customer loyalty programs and targeted promotions have been proven to attract more customers and spread fixed costs over a larger revenue base, potentially leading to price reductions.

Transparent communication with customers about price changes and a continuous focus on cost analysis are essential components of a comprehensive strategy to lower prices during inflation while maintaining competitiveness.

When prices rise and job stability is low, consumers should adopt several financial and lifestyle strategies to navigate these challenging economic conditions.

It's crucial to prioritise financial well-being by creating a budget that accounts for the increased cost of living. Cutting unnecessary expenses, focusing on essential purchases and finding ways to save on everyday items can help stretch limited resources.

Additionally, consumers should explore opportunities to increase their income, such as part-time work or freelance gigs, while simultaneously investing in their skills and education to enhance their long-term employability. Building an emergency fund to provide a financial cushion in case of unexpected expenses or job loss is essential.

Consumers absolutely must take the responsibility to seek out community resources and assistance programs to help meet basic needs. It's also wise to explore alternatives to traditional employment, such as entrepreneurship or the gig economy, to diversify income streams and increase financial resilience.

The public should make an effort to stay informed about economic trends and, if necessary, seek professional financial advice. This will aid in making informed decisions during periods of rising prices and job instability.

Big businesses like Walmart, Amazon, Aldi and Whole Foods can and should employ various strategies to lower costs before holidays like Thanksgiving for instance and provide assistance to families. These strategies include optimising their supply chains to reduce transportation and inventory costs, negotiating better deals with suppliers to secure lower prices on essential holiday items, implementing cost-effective inventory management systems and leveraging economies of scale to drive down production costs.

They should also be investing throughout the year in energy-efficient technologies to reduce operational expenses, explore innovative packaging solutions to minimise waste and promote local sourcing to support small-scale farmers and reduce transportation costs.

Many businesses have the ability to offer special promotions, discounts and loyalty programs to help families save on Thanksgiving essentials. Collaborating with food banks and nonprofit organisations to donate surplus food and provide assistance to families in need would also make a significant impact on the community during the holiday season.

Why not come together and help those families struggling to make ends meet so they can enjoy Thanksgiving – a time to give thanks for what we have and not worry about what we don't have?

By Daniel Elliot

Daniel is a business consultant and analyst, with experience working for government organisations in the UK and US. On his free time, he regularly contributes to International Business Times UK.