Throughout my lifetime I have seen the Jamaican Dollar lose ground in value against the US Dollar (the current standard of exchange) time and again. I remember in 1985 when the exchange rate reached J$5:US$1, and how concerned I was – even at that age – about the value of my nations currency. I worried that we would become like Mexico with the peso :s . When I got to high school I remember it hitting J$14:US$1 and yes, I was still sad. This was happening with a lot of constraints on currency exchange by the government, so there was a very lucrative black market for the dollar – looking at an exchange rate of close to 20:1. By the time I graduated High School in 1994 we were looking at JM$33:US$1 I remember 50:1 (2002), 60:1 (2003) etctera. I have followed currency for so long, I was the only one in my high school with a US Dollar account (at Century National and we know how that went).
For as long as I can remember, the only trend the Jamaican dollar has had was down. Every so often there was a one week glimmer of hope with a dollar or two of revaluing but it was always around Christmas – I think the parties contribute to that but that’s another post. The devaluation would return with a vengeance after that. Gain a dollar or two for a week and then lose by four or five right after. Like a fat chick and trend diets the Jamaican dollar would revalue and devalue and with it’s general loss in value came the loss of faith in it by the people. Eventually one understood why businesses didn’t move price points with the shifting of the dollar but with the general trend it moved in. We even understood why there was a buffer on our credit card and JPS exchange rates for a while.
However, something has changed. In the past 12 months the dollar has been relatively stable, (May 1, 2009 – 88.90 to May 4, 2010 89.03) there’s no real reason for that buffer padded onto our bills anymore. As consumers, however we had gotten so used to it that we didn’t even bother wondering why it was still there. Analysts didn’t even seem to notice much either, I don’t recall the news speaking of this economic indicator of stability. The news was caught up in a whole other matter, important yes, but this affected us too.
Then we had the Dudus incident, the nation froze for a day or two, but retailers froze altogether. No one cared that goods were short in stores, there literally was bread hunt going on by Wednesday with the accepted excuse – State of Emergency. Everyone worked with it understanding the national position at the time.
After this entire situation, and I believe as a result of this, the dollar suddenly gained against the US. As previously stated the beginning of May it was solidly chilling at 89 but it went as low as 85.83 and seems to have settled in at the 86 point. YAAAY! for the Jamaican Dollar! It gained and has pretty much held it’s revaluation for over a month! Let us celebrate, have a tax holiday, something!
Nope. Nothing. Nada. Zip. Zilch. Zero.
Instead of a hurrah for our dear dollar it seems as though price setters are waiting on the dollar to lose it’s ground again. Claiming that the goods were bought at a higher rate. Really? Are you saying the imported broccoli is that pumped up with preservatives that it has lasted since May without ANY damage? or are those giant American onions just sitting on the shelves?
No, not every single imported good has such a limited expiration date. Clothes, Shoes, Sneakers do not have a high turnover rate, but vegetables, meats, canned goods and bottled juices do! We, the consumers, are not idiots. We may be lax in fighting against the status quo but we are not stupid.
As far as I can recall, only 3 companies have adjusted their prices, Jamaica Broilers, WISYNCO and Lascelles. Two reasons no one else has done this: 1. You are betting on the Jamaican Dollar to once again devalue; 2. You’re just running with the higher profit for as long as you can get away with it. This isn’t a good image. It is in fact bad for your image, both internally and externally. What you are saying to your employees and consumers is that you are not here for the benefit of this nation. That you really only are looking to make a buck (or 4 in this case) raping the economy much in the way colonization did.
Here is where the problem comes in…
IF you keep your prices up despite the gains made by the dollar then you are subconsciously telling your employees that you cheat people so they in turn cheat you. How? Simplest form is pilferage, then they buy stuff for family and friends in your employee stores, then there’s the extra sponsorships going out. It’s the little ways :)
Secondly, consumers will begin to view your brands as too costly when compared to other products with similar brand image previous to this. This means you will lose market share and value, not to mention the weakening of your brands strength. This does lead to poor sales – but that’s up to you.
In a nutshell: If you live or do business in Jamaica, do not discount the people of this nation, keeping your prices set at a former exchange rate will work against you. Fix it or suffer the consequences.