Comment by captainbland | Hacker News Reader

Comment by captainbland | Hacker News Reader

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This seems like a misunderstanding of how supply and demand acts in the real world. I didn't say people weren't buying premium products at all - they very much so are. They're just not selling out at the insane rate everything else is. If anything this suggests that the inexpensive products would (assuming we were operating an idealised free market, which we're kind of not because stores are now attempting to limit purchases) become more expensive to match the premium products - but then of course the premium products would sell more (more utility for the same money) so things would balance out again.

Retail pricing logic suggests that brands would rather price relative to the baseline pricing anyway. It's more likely to be generally inflationary unless of course suppliers manage to meet the current demand and even if they do there's a big risk that demand will crash suddenly at some point which could cost the suppliers or retailers greatly as well as they overproduce items that never get bought and cost money to store. It's a big mess, really.

But you realize the reason expensive things are expensive is because there are enough people willing to pay the premium. If demand for premium products diminishes, premium product producers can either lower prices to meet demand at lower price point, or lower production to new lower levels of demand.

Either way there is a present glut of expensive things without enough demand, so existing oversupply is liquidated. So expensive things get less expensive.

> If demand for premium products diminishes,

This is the crucial part, there is no reason to believe this is happening. There is not a 'glut' of expensive things as many are forced to buy the expensive alternative when their preferred choice is gone, and regular consumers of the premium brands still buy them. They just sell out less fast.

The economy is 75% of what it was 3 weeks ago. Numerous industries have laid of 50%+ of their laborers. I’m going to wager there is less demand for premium products.

Perhaps we are each talking too generally and need a bit more specificity. If we're talking about premium products in the sense of iPhones, new cars, video games and other kinds of irregular purchases like that then I expect you're right at least in the short term. But the relevant point of discussion here is what you tend to need from a supermarket in day-to-day household consumables and their respective economy/premium products which contribute to a household's regular expenditures. In the household consumables case, the premium products are definitely still selling.

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