Scrutable

lpm wrote: ↑

Fri Jan 28, 2022 8:16 am

Bird on a Fire wrote: ↑

Fri Jan 28, 2022 1:41 am

Yes. People are collecting a lot of data to answer the wrong question.

The right question relates to the cost of products available in people's local shops.

These products are available at these prices in stores. They are not online only. But individual stores might be out of stock or not carry the line.

Exactly.

Bird on a Fire wrote: ↑

Fri Jan 28, 2022 10:30 am

Woodchopper wrote: ↑

Fri Jan 28, 2022 5:59 am

Bird on a Fire wrote: ↑

Fri Jan 28, 2022 1:41 am

Yes. People are collecting a lot of data to answer the wrong question.

The right question relates to the cost of products available in people's local shops.

Yes, indeed. What’s needed is for people to regularly visit a representative sample of shops and record the prices of a set of goods that are key purchases by consumers.

Which is the methodology used by the Office of National Statistics. You can read the December data here: https://www.ons.gov.uk/economy/inflatio ... cember2021

Yes, but their index includes stuff like hotels, furniture, eating out and fancy food and wine.

Monroe is proposing a related index, but using a set of goods that are key purchases by very poor consumers.

I don't think a new index is needed, just that the existing one is a bit more disaggregated. Based upon Monroe's twitter feed, it seems like the ONS have said that they'll do that.

Excellent.

I suppose the other issue is what constitutes a "representative sample" of shops. To represent the very poorest they probably need to focus on shops walking distance from where the poorest live, so excluding the big box out-of-town jobbies. Which is probably possible with disaggregation as well.

lpm wrote: ↑

Fri Jan 28, 2022 8:16 am

Bird on a Fire wrote: ↑

Fri Jan 28, 2022 1:41 am

Yes. People are collecting a lot of data to answer the wrong question.

The right question relates to the cost of products available in people's local shops.

These products are available at these prices in stores. They are not online only. But individual stores might be out of stock or not carry the line.

Surely the prices are going to differ from shop to shop. A loaf of bread purchased from a city centre store is going to be more expensive than from an out of town hypermarket. The former has higher rent per square meter, and probably higher transport costs.

Woodchopper wrote: ↑

Fri Jan 28, 2022 10:37 am

Surely the prices are going to differ from shop to shop. A loaf of bread purchased from a city centre store is going to be more expensive than from an out of town hypermarket. The former has higher rent per square meter, and probably higher transport costs.

We come back to the unfortunate fact that everyone's situation is different, and their own individual inflation rate can thus be rather different. Ultimately if there is to be any kind of an index, it has to make an average.

Yes, I tried to explain what an average was earlier, but appear to have been unsuccessful.

The ONS

- is already fully aware of these issues
- continually monitors whether the overall inflation rate is distorted for different deciles
- updates frequently for changes in baskets
- compares itself to practices in other countries and listens to academic studies

And the ONS already had a major IT project underway to take automated feeds from supermarket checkouts, to "increase the number of price points each month from 180,000 to hundreds of millions". This is expected to be complete in a year's time and will increase the granular detail available to their experts.

I'm not at all clear what victory Monroe is claiming in this. She seems to be claiming credit for things the ONS was doing already. It would be surprising for a twitter campaign to result within a couple of days in any significant change to a government service, given what we know about bureaucracy and government oversight.

When I lived in sem-rural Gloucestershire, there were a lot of social housing estates built exactly where the Big Four supermarkets weren't. They involved either a very long walk or a very expensive bus ride (or two). Rural bus fares are prohibitively high. There were usually a few mini-markets dotted around though. Prices considerably higher than the big stores. In many areas accessibility is a huge issue for less well-off people without private transport.

IvanV wrote: ↑

Fri Jan 28, 2022 10:58 am

Woodchopper wrote: ↑

Fri Jan 28, 2022 10:37 am

Surely the prices are going to differ from shop to shop. A loaf of bread purchased from a city centre store is going to be more expensive than from an out of town hypermarket. The former has higher rent per square meter, and probably higher transport costs.

We come back to the unfortunate fact that everyone's situation is different, and their own individual inflation rate can thus be rather different. Ultimately if there is to be any kind of an index, it has to make an average.

Of course - but an average of what?

The current aggregated CPI isn't representative of the poorest households (nor is it intended to be). If we accept that the poorest households should receive extra political attention, perhaps it's reasonable to expect the government to collect data about them specifically, rather than extrapolating from a national average which, as you've already demonstrated par excellence, is known not to be representative of their circumstances.

An index based on the cheapest available absolute essentials (food and hygiene products, children's clothes) in minimarkets is presumably what's needed.

Opti wrote: ↑

Fri Jan 28, 2022 11:11 am

When I lived in sem-rural Gloucestershire, there were a lot of social housing estates built exactly where the Big Four supermarkets weren't. They involved either a very long walk or a very expensive bus ride (or two). Rural bus fares are prohibitively high. There were usually a few mini-markets dotted around though. Prices considerably higher than the big stores. In many areas accessibility is a huge issue for less well-off people without private transport.

Yep, that's true of everywhere I've lived in the UK, and abroad except buses tend to be cheaper. Shouldn't be a surprise to anybody who's given the issue a few seconds' thought, which isn't necessarily everyone posting indignantly.

When I was a kid, if my mum got sick my sister and I would walk 25 mins over the fields to the out of town place. (Town centre a similar distance, with worse shops). That wasn't a social housing estate, though - they were indeed further away.

This is about inflation. So it's not a question about the existence of buses, but a question of whether buses are getting more expensive by more than average. Or alternatively if supermarkets are migrating further away from homes.

In fact cheap supermarkets are moving closer to homes. Aldi had 300 stores in 2013. They have 930 now and are opening around 50 a year. Lidl has come from 250 to 880 and are opening at the same pace.

The basic story of UK supermarkets over the past decade has been all about the rise of the value proposition stores and the falling revenues of the big four. This can't just be ignored in this conversation. There are more supermarkets, taking market share from the old corner shops and minimarkets, and there's now a massive price anchor, as shown by Tesco and Sainsburys running in-store advertising saying "ALDI PRICE MATCH".

I'm sure there are plenty of people who have to shop at a local Londis or Spar or whatever, where prices are probably higher. But again, this is about inflation. Is inflation at a Coop higher than at a Morrisons? Who knows. Nobody. Only the ONS has a hope of finding out.

Also, don't forget to add other essentials to your basket of absolute essentials. It's not just food and basic household items and clothing. Gas and electric. Mobile tariff, broadband and TV. Computer games and basic recreation. Pubs, takeaways and fast food. Alcohol, tobacco and lottery tickets. Don't be a Tory MP and think that poor people don't have basic living stuff and if they own a flat screen TV then by definition they can't be poor. Does anyone really think an amateur can construct a representative basket?

Bird on a Fire wrote: ↑

Fri Jan 28, 2022 11:19 am

IvanV wrote: ↑

Fri Jan 28, 2022 10:58 am

We come back to the unfortunate fact that everyone's situation is different, and their own individual inflation rate can thus be rather different. Ultimately if there is to be any kind of an index, it has to make an average.

Of course - but an average of what?

That is the difficult point.

First you have to decide what sub-population you wish to represent in the average. Then you need to research that sub-population to understand their consumption in sufficient detail to have a sufficiently representative index for them.

In the ONS paper I referred that calculated income specific inflation for 2003-2018, it calculated an income-specific inflation index by saying that this income group spends x% on energy and y% on food, and reweighting the proportions in the CPI for that. But maybe that's not good enough. Perhaps a specific sub-population faces a different average price for energy (a lot of them are on pre-payment meters, don't always have the credit rating to switch to certain suppliers) and a different average price for food (less accessibility to the "average" shop, a different portfolio of food purchased). So maybe they need to do more detail about that.

And ultimately, there is that question, what sub-population do you wish to represent in the average, and how do you describe it and identify it, and their spending habits.

It's not just about inflation - it's about the cost of living.

Monroe's tweet was

Woke up this morning to the radio talking about the cost of living rising a further 5%. It infuriates me the index that they use for this calculation, which grossly underestimates the real cost of inflation as it happens to people with the least.

She's specifically pointing out that measuring inflation across the economy underestimates impacts on "those with the least".

Who are they? One thing that Tory welfare reforms have increased is precarity. Delays to benefits, sanctions, delays waiting to win on appeal, difficulties combining irregular employment with UC.

Somebody might own a TV, but then find themselves without an income for a month or so. At that point, they'll probably not be buying DVDs and pub meals if they can't feed their kids or keep the lights on. Those are the people Monroe is normally talking about - those really literally scraping by.

So inflation is relevant, but so is, for instance, how supermarkets respond to it. Perhaps they stop stocking discount lines in Tesco Metros where there's no competition nearby, and put the prices up across the range. There's much less competition on a sink estate than online and in hypermarkets targeting drivers.

As for "who knows", I expect the poor/precarious people shopping in those shops have a pretty decent idea. If you habitually scan every product for the price per g, hunt the reduced stickers, analyse BOGOFs etc every week you'll notice if your meagre funds don't go as far, because of course you will.

I don't get why people would be keeping receipts for years, though. That's the oddest part of the sampling.

Maybe we should talk about what we mean by poor.

The standard rule of thumb is the bottom two deciles. Those 20% mean about about 8 million working age adults, 2 million pensioners and 4 million children. There are different metrics and if you want to say 17% or 22% I won't stop you. I don't think we know how bad the pandemic has been in worsening the percentage.

Conservatives don't like this. They want to present it as the bottom 10% or 5%. But even they don't try to define poor as the lowest 1%.

The cost of living crisis for the poor goes well beyond the desperate and precarious people. We're talking about families with an adult in part time or full time work.

lpm wrote: ↑

Fri Jan 28, 2022 2:18 pm

Maybe we should talk about what we mean by poor.

The standard rule of thumb is the bottom two deciles. Those 20% mean about about 8 million working age adults, 2 million pensioners and 4 million children. There are different metrics and if you want to say 17% or 22% I won't stop you. I don't think we know how bad the pandemic has been in worsening the percentage.

Conservatives don't like this. They want to present it as the bottom 10% or 5%. But even they don't try to define poor as the lowest 1%.

The cost of living crisis for the poor goes well beyond the desperate and precarious people. We're talking about families with an adult in part time or full time work.

You are talking about that. Jack Monroe is not.

Yes she is.

She is, quote, talking about price rises "for people on minimum wages, zero hour contracts, food bank clients, and millions more."

ETA: she specifically and repeatedly talks about the 4 million children growing up poor, which is the figure for the bottom 20%.

lpm wrote: ↑

Fri Jan 28, 2022 2:23 pm

She is, quote, talking about price rises "for people on minimum wages, zero hour contracts, food bank clients, and millions more."

ETA: she specifically and repeatedly talks about the 4 million children growing up poor, which is the figure for the bottom 20%.

Ok, but her particular experiences that she's drawing on are of the order of having £10 or less a week for food and other necessities. Which is why the shopping basket she was talking about was ~£4.

She has posted some Sainsburys prices from Jan 2015, so we can see what inflation over the past 7 years has been.


https://twitter.com/BootstrapCook/statu ... 7252948994

Lettuce: was 50p, now 43p, -14%
Lemons: was 110p, now 68p, -38%
Lard: was 45p, now 39p, -13%
Lemon Curd: was 25p, now 65p, +160%
Lasagne sheets: was 35p, now 70p, +100%
Lemon Juice bottle: was 55p, now 60p, +9%

My suspicion is her exercise in going through her old notebooks is going to leave us all very pleased at how Aldi and Lidl have come storming into the UK to hold prices down.

It's a less rosy picture at Asda, where she shops - loads of Smart Price products disappearing
https://twitter.com/BootstrapCook/statu ... xxh7w&s=19

I guess Asda are entitled to follow whatever strategy they want. Maybe they want to move up to Waitrose-land.

Number of UK stores:

Asda 633
Aldi 930
Lidl 880

I don't know where Monroe lives and what stops her switching to the value stores. But to take a couple of random places:

Stroud: Aldi opened 2018, Lidl 2021
Winchester: Aldi opened 2013 and looking for further site, Lidl looking for a site

It's misleading to track a single store from 2015 if since then a couple of highly competitive alternatives have opened up.

IvanV wrote: ↑

Fri Jan 28, 2022 10:58 am

Woodchopper wrote: ↑

Fri Jan 28, 2022 10:37 am

Surely the prices are going to differ from shop to shop. A loaf of bread purchased from a city centre store is going to be more expensive than from an out of town hypermarket. The former has higher rent per square meter, and probably higher transport costs.

We come back to the unfortunate fact that everyone's situation is different, and their own individual inflation rate can thus be rather different. Ultimately if there is to be any kind of an index, it has to make an average.

Yes, and it would be trivially easy for the ONS to determine where, on average, the poorest 10-20% of the population live, to look at car ownership in those areas, and to thus weight the proportion of the average that they dedicate to the prices in the local shops within walking distance of those areas and the proportion they dedicate to shops in general.
A weighted average taking into account all relevant factors.
Really not complicated.

lpm wrote: ↑

Fri Jan 28, 2022 12:11 pm

This is about inflation. So it's not a question about the existence of buses, but a question of whether buses are getting more expensive by more than average. Or alternatively if supermarkets are migrating further away from homes.

In fact cheap supermarkets are moving closer to homes. Aldi had 300 stores in 2013. They have 930 now and are opening around 50 a year. Lidl has come from 250 to 880 and are opening at the same pace.

The basic story of UK supermarkets over the past decade has been all about the rise of the value proposition stores and the falling revenues of the big four. This can't just be ignored in this conversation. There are more supermarkets, taking market share from the old corner shops and minimarkets, and there's now a massive price anchor, as shown by Tesco and Sainsburys running in-store advertising saying "ALDI PRICE MATCH".

I'm sure there are plenty of people who have to shop at a local Londis or Spar or whatever, where prices are probably higher. But again, this is about inflation. Is inflation at a Coop higher than at a Morrisons? Who knows. Nobody. Only the ONS has a hope of finding out.

I bet that both Co-Op & Morrisons do

lpm wrote: ↑

Fri Jan 28, 2022 3:15 pm

I don't know where Monroe lives and what stops her switching to the value stores. But to take a couple of random places:

Stroud: Aldi opened 2018, Lidl 2021
Winchester: Aldi opened 2013 and looking for further site, Lidl looking for a site

Winchester's Aldi is miles away though (and, interestingly, next to a Waitrose), in what looks to me like a pretty affluent suburb (most of Winchester looks pretty affluent, to be fair).

The most deprived area, Stanmore, has a Premier Stores, a One Stop, and a food bank.