snip ~ from August 17th ~ Switzerland's central bank announced further measures to weaken the franc, but failed to take the anticipated step of pegging the franc to the euro to discourage safe-haven investors.
August 22, 2011
Swiss Supermarkets Cut Prices on Franc Strength
ZURICH—Swiss supermarkets are planning further price cuts to tackle the soaring Swiss franc which is driving food shoppers over the border into Germany and France.
Retailers like the cooperatives Migros and Coop, as well as discounter Denner, have already cut prices of food, drinks and household and personal care items by up to 20%.
Now they plan further reductions in the coming weeks which will extend to other products.
Continues ..
"Because of the Euro we have had negotiations with our suppliers like Nivea and Ferrero," said Martina Bosshard, spokeswoman for Switzerland's largest supermarket chain Migros.
"We will continue to negotiate," she added. "We want lower prices when we import and we want to give lower prices to our customers."
The supermarkets said they were passing on the reductions after negotiating better prices with suppliers when they buy products in Swiss francs.
The franc has appreciated to record levels against the euro and dollar this year. It has gained 10.5% against the Euro in the year to date, and 18.9% against the dollar.
Migros said Monday it was cutting the price of 500 branded products by 10% to 20%.
The cuts follow an average 4% reduction across its whole range since the start of the year, with Migros investing around 300 million Swiss francs in price cuts this year.
Coop, the second-largest supermarket in Switzerland, said that it was cutting the price of 700 items by up to 20%.
Earlier this month Coop removed 95 brands from its shelves after a number of suppliers refused to drop the prices of imported goods.
Juerg Peritez, head of marketing and purchasing at Coop, said: "Many international suppliers have now recognised the urgency of the situation."
The supermarkets have been losing sales to consumers who have crossed the border into France and Germany to take advantage of the currency exchange.
read full article @ http://online.wsj.com/article/SB10001424053111903327904576524740292236386.html?mod=djkeyword
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August 17, 2011
Switzerland's central bank announced further measures to weaken the franc, but failed to take the anticipated step of pegging the franc to the euro to discourage safe-haven investors.
The Swiss National Bank (SNB) said it would further boost liquidity by expanding "sight deposits" – overnight deposits by banks to help liquidity – to Sfr200bn (£152bn) from Sfr120bn and was prepared to take more action if necessary.
The measures saw the euro strengthen initially, past Sfr1.15 for the first time this month. But once it became clear that the bank had stopped short of radical action, heavy buying of the franc resumed.
Over the past 18 months the franc has risen 25pc against the euro, squeezing Switzerland's vital export market. Almost 50pc of Swiss products, from cheese to pharmaceuticals, are exported. Tourism has also been hit by the currency swing as the price of goods has soared.
Clive Lennox, head of foreign exchange trading at Clear Currency, said: "The supposedly neutral Swiss are causing some amount of trouble. The SNB shied away from its threat to peg the Swiss franc to the euro, boosting the safe-haven currency. Investors initially wound down their speculative short franc positions as protection against eurozone sovereign debt and global growth concerns."
http://www.telegraph.co.uk/finance/currency/8707841/Safety-seekers-still-target-Swiss-franc.html
