Just curious of your opinion/prediction... Just a few months ago the price of espresso equipment took quite a hike to account for the then plunging dollar to Euro conversion. Given the dollar's rapid rebound, do you think we will see price adjustments in time for Christmas to reflect what prices were over two years ago?

Just two to three months ago a US dollar would get you .62 Euro cents, but that same dollar today will get you just under .80 Euro cents (.798); about the same as it was two years ago. Given these figures, a machine that was 1000 Euro two/three months ago would run $1,666 (US), but today that would be $1,250 (US). Could this be a flashback Christmas?

It's not clear. If the recession doesn't bite, you'll be right. If the recession does bite, you can expect some short term price cuts to correct inventory. After that vendors will have to scramble to make rent and payroll, and can either choose to go downscale to keep up sales volume, or go upscale to make up lost sales with increased margins.

I'm not sure we'll benefit from the ones going downscale, so we may see reduced choices and no reduced prices on the high end machines and grinders.

For the ones that do go downscale, this might be the moment when Chinese made low end single boilers and super autos start making a dent.

My understanding is that the retailers of high-end espresso equipment here get a cargo crate full of whatever they are importing, so this is paid for when the goods are shipped (let's say, for example, in August). Then, the resellers here charge a price relative to what they paid the importer. By my understanding, prices here for imported equipment will not change until a new batch is imported at a new price - for example, if a crate of Vibiemme DoubleDomo's came across the pond over the summer, no amount of currency fluctuation will change the price that the importer paid during the summer, so a price cut here would be a reseller's decision to narrow their own sales margin.

Does this make any sense?

resellers here charge a price relative to what they paid the importer

This is absolutely correct. Payment at the time an import order is placed is converted at the then exchange rate. Depending on the espresso machines or gear being imported, it can take a few months until the goods arrive at the importer's warehouse ready for sale. The exchange rate can be very volatile (20% in 3 months is not unusual) and unless the importer is hedging the exchange risk, he absorbs through the profit margin any adverse movement in the rate.

Another important factor to consider is the increase in raw materials and shipping costs the past 2 years, and although stainless steel prices and ocean freight rates have started to drop the past few weeks in response to the recession, it will take a little time for these price adjustments to work through the supply chain.

Also be aware that the European and Asian economies are suffering just like the US economy, and as the European Central Bank is coordinating its activities with the Fed and Treasury, it will be interesting to see whether the US$ vs. Euro will continue to appreciate.

There is a related thread around this time last year when the dollar was headed in the opposite direction.

uscfroadie wrote: Given the dollar's rapid rebound, do you think we will see price adjustments in time for Christmas to reflect what prices were over two years ago?

No.

Christmas inventory has already been purchased and is, if not already in stock, is on its way.

Prices may come down in the summer.

aindfan wrote: - for example, if a crate of Vibiemme DoubleDomo's came across the pond over the summer, no amount of currency fluctuation will change the price that the importer paid during the summer, so a price cut here would be a reseller's decision to narrow their own sales margin.

Does this make any sense?

that does make sense, however, since consumer spending is tightening up, dust and cobwebs on inventory might change the price.