A 5% increase in operating profit margin equals a 20%increase in profit I find it quite distressing that so many business people believe that lowering prices is the best way to increase sales. This belief seems to stem from the understanding that there is an inverse relationship between price and demand. Surely, in 2019, there […]

A 5% increase in operating profit margin equals a 20%increase in profit I find it quite distressing that so many business people believe that lowering prices is the best way to increase sales. This belief seems to stem from the understanding that there is an inverse relationship between price and demand. Surely, in 2019, there should be a general awareness that it is very risky to apply the rules of supply and demand so simplistically.I am equally distressed when businesses willingly and wilfully sacrifice margin in the hope of maximising volume without first doing the numbers and fully understanding the consequences. I was listening to a hospitality consultant recently who explained that the first thing she looks at when assessing a restaurant in trouble is their dependence on UBER eats. She suggested that cancelling this service is very often the first thing she does.It is difficult for restaurants to make…