Probably a Brexit related thing!
I've been looking at pedals and guitars and even most of the MXR range are £100+ now, i think the last time i bought new pedals these were in the £60-80 region. The last OCD i bought (v1.7) was £105, now everywhere seems to be doing them at over £140!
I know prices rise, that's a given, but i think that on pedals we might just be being taken advantage of. Boss pedals have only increased a little, so i'd still see them as being the best value on the market.
Maybe the influx of "boutique" brands into the market place has inflated the prices or made manufacturers think they were charging too little.
I also took a look at new PRS guitars, the last brand new PRS i bought was a CE22 20th Anniversary, it cost me £999 in 2007, new ones now all seem to be £1500+
So what are we seeing? Is it inflation, greed or demand?
Comments
Expect it to get worse not better.
From December 2015:
http://www.telegraph.co.uk/finance/currency/12065157/Pound-is-most-overvalued-currency-in-the-world-analysts-claim.html
From that article:
It [Deutsche Bank] believes the pound could fall as low as $1.27 next year and $1.15 in 2017 from about $1.485 today if the US Federal Reserve continues to tighten monetary policy and the Bank of England leaves interest rates on hold.
It's not just Deutsche Bank. The same article refers to the IMF as well:
Earlier this year, the International Monetary Fund said the pound was between 5pc and 15pc overvalued.
Where we are now is pretty much in line with the Deutsche Bank forecast. The Brexit vote undoubtedly played a part but it's been grotesquely overblown by the media.
Conversely, there are those who are now saying that the pound is undervalued:
http://www.independent.co.uk/news/business/news/pound-sterling-is-the-most-undervalued-world-currency-and-will-rebound-to-pre-brexit-levels-a7597666.html
According to that Independent article, Morgan Stanley are predicting that the pound will be back at $1.45 by the end of 2018.
That's not the only article saying the pound is now undervalued. If you can be patient it might make sense to hold off any major purchase of US made gear.
Having said that, even when the pound does go back up, don't expect prices to fall very quickly. They will try to benefit by increased margins.
Than don't buy those pedals. I mean they're toys for wealthy first-world types, nobody really needs them.
You already mentioned a pedal brand whose price increases aren't as steep, buy theirs.
Etc etc etc
Both have quality made in USA lines and cheaper higher volume lines made in the Far East, both business models based on a globalised economy.
"America First" policies and tariff's could have a very interesting effect. Given the similarity in cost now between a low-end Gibbon and high-end Epi, what could happen there?
Obviously that's simplifying it, because if the sales volume decreases significantly (the US is the biggest market, after all) then the price could go up anyway, but that's the crux...
Check out the price of a Suhr Satin Modern.
I think they were about £1599 - about 3.5 years ago... then they went up to £1699... then £1799... then £1899. Now, GuitarGuitar are listing their newly arrived ones for £2199.
http://www.guitarguitar.co.uk/electric_guitars_detail.asp?stock=170313308715007-624940
... but the government tells us inflation has only just now risen to 2.3% per annum.
What makes it also worse is that all prices are based on cost + a margin , as such price increases are compounded - ie if a pedal was a £100 and a UK dealer added 35% (Dealer makes £35) - the pedal is now £135 - yet a 10% price increase on the cost of the pedal now makes it £110 - now add the 35% dealer profit (the dealer now makes £38.5) and it is £148.5 in the shops - Like wise the vat on £135 is less than the vat on £148.50 - so all prices are compounded as such
Now add a falling £ v $ and it makes it far worse - and that is effectively were we are today
even if the cost of a Strat had not gone up at the factory and the cost was say $1000 - UK cost ex any tax/shipping/import duty etc would have been £740 in 2015 - Today the same Strat costing $1000 would now be around £869 - Hence the price of the Strat leaving the factory can remain fixed, but it is now the cost of buying the dollars to pay for the guitar that has changed
Traders may need higher margins to compensate for fewer sales, which will only exacerbate the problem.
If something doesn't happen to counterbalance this (eg a slump in the value of the dollar as people wake up to the realisation that the country is being run by a befuddled sociopath) I think we'll see the UK market for high end guitars shrink and more retailers go the wall.
Small silver lining, UK makers may find the going a little easier.
Arguably the quality of top-end Epis and Squiers is damn close to the US models anyhow, but I'll leave those worms in the can!
He told me that parasites have caused wholesale prices to increase by as much as 50%.
I replied by saying that surely we should now stop the name calling because I heard Andrew Marr say that "we are all Brexiteers now".
Exchange rate was about £1:$1.6 and now is £1:$1.22 or thereabouts
And even the USA electing the Cheetofuhrer hasn't reversed that...yet
Many guitars have a re-sale value. Some you'll never want to sell.
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For example, a year ago the Laney L5 Studio was selling for £439 in most places. Now they are £509, an increase of 16%
Similarly the Victory V40 has increased from £829 to £899.
I have a good customer that I've known for nearly 40 years - He is a similar age - left school around 1976, as a 16 year old - Gigging in bands and in 1978 purchased a new LP Custom for just over £400 - His dad told him he was a fool - His dad is no longer around, yet he still has that guitar and he thinks I'm not so much a fool now
Plus my dad paid under 3K for his first house in 1966 and could not afford the deposit so borrowed it from his boss
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