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Overtrading, what the FCUK?

April 10, 2010

Beast monster vs Amy Pond

Language is great; every now and again someone invents a new word or corrupts an existing one to mean something else. Overtrading

Here’s a business school definition:

1. General: Transacting more business than the firm’s working capital can normally sustain, thus placing serious strain on cash flow and risking collapse or insolvancy.

2. Securities trading: Excessive buying and selling activity by a broker in an attempt to extract higher ommission from a customer.

Here’s another good definition from an American source this time.

1. The act or practice of buying goods beyond the means of payment; a glutting of the market.

Just google it and you get 1,330,000 for over trading definitions in 0.11 seconds. So I spent a few happy minutes browsing these to find something of relevance to the ‘overtrading’ that our poor supermarkets are afflicted with. Wiki comes up with a great one that the hypermarket fat-cats must have seen:

Boredom may also lead to impulsive (and sometimes excessive) actions, that serve no purpose and may damage one’s self-interest. For example, studies in behavioral finance have shown that stock traders can enter into “overtrading” (buying or selling even without any objective reason to do so) simply because they feel bored when they have nothing worth doing. Using recreational drugs provides another example of the possible perils of boredom.

The fat-cats of course have corrupted the word to mean their hypermarkets are doing criminally well. To any other retailer they would be smiling with joy that their shop /store/business was busy. Would the market trader be whinging that all their stock had sold out because they had a busy day? Ever done a boot fair? “Damn my boot fair table was so busy I sold out and didn’t have to take any of the rubbish home, such was my overtrading”.

The fact is Sainsburys are not busy/full to capacity every day. They have a full shop 4 weeks before xmas (when they jack up the prices) and maybe the odd rush hour during the week, but the rest of the time the tills are half closed. Ever seen more than 2 tills open in Aldi North st-another store that is perilously overtrading?

Just like Tesco, Sainsburys whinge in their planning application that their store is doing well and therefore that is a good planning law reason for doubling in size. Grrrrrrrr.

Q: More Amy Pond or monster Sainsburys images?


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