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Swiss slash prices over soaring franc

Monday, February 02, 2015 - 02:21

The surging Swiss franc is having a devastating impact on shoppers and homeowners in Switzerland. Hayley Platt reports on how Swiss shops and supermarkets are dealing with the situation.

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Switzerland is known for quality products. And many shoppers are prepared to pay extra for them. But are prices there just getting too high? The director of this store thinks so. Nicholas Brunschwig is also the head of the Swiss Federation of Companies. (SOUNDBITE) (French) BONGENIE & GRIEDER STORES' DIRECTOR, NICOLAS BRUNSCHWIG, SAYING: "We wanted to remain credible for our clients, our prices had become 20 to 25 percent more expensive than in neighbouring countries -- France, Germany, Italy -- it seemed unbearable for us." Discounts of around a fifth have become common over the last two weeks. Since, exactly, the Swiss National Bank removed its cap on the Swiss franc. The move sent it - and price tags - soaring against the euro. Brunschwig says their margins are hurting badly since cutting prices. His chain employs 600 people in around 20 stores. The hurt could only just be beginning for them - and others. (SOUNDBITE) (French) BONGENIE & GRIEDER STORES' DIRECTOR, NICOLAS BRUNSCHWIG, SAYING: "If this exchange differential were to continue for a very long time, there will be consequences on the Swiss economy, and of course on our company, which will impact the job market. In that case, wages will tend to decrease, not for people who are already in charge, but for people who will be hired, with lower salaries. Unemployment will probably rise, there will certainly be more elements of this sort, and our labour market will no doubt have to be more flexible." And in fact the Swiss government is saying labour laws will be freed up to give companies more flexibility. It's mixed news, say Swiss unions. The biggest of them, Unia, says it could help key sectors like machine industry. But regional secretary Allessandro Pelizzari says other may try to jump on the bandwagon for the wrong reasons. (SOUNDBITE) (French) REGIONAL SECRETARY OF BIGGEST SWISS TRADE UNION UNIA, ALLESSANDRO PELIZZARI, SAYING: "Several companies haven't been impacted by the exchange rate fluctuations, but they have used it to impose restructuring plans. The unions are against this, because employees have already experienced a relatively large salary cut in the past two years." Many hope the high prices will be a temporary phenomenon. Others warn that along with lower wages and higher unemployment, they could be here for some time to come. With one recent survey showing the risk of a Swiss recession now standing at 40 per cent - four times where it was just weeks ago.

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Swiss slash prices over soaring franc

Monday, February 02, 2015 - 02:21