GBGC: Is the current inflation transitory or not?

Warwick Bartlett, Chief Executive at GBGC, shares his thoughts on whether today´s inflation is transitory.

Press release.- GBGC wrote previously with a warning about the possibilities of rising inflation. There has since been a discussion that current inflation is enduring today is transitory.

Warwick Bartlett, Chief Executive at GBGC, thinks it isn´t. “A clear signal came this week when Amazon told VISA that its credit card charges were too high and they were being dropped in January 2022 in the UK market. Amazon has two choices, either Mastercard or VISA, so this change in policy is significant”, he said.

Bartlett explained that if inflation is not transitory, companies working on low margins will be threatened. Amazon works on an operating profit of only 6 per cent and that includes its highly lucrative cloud division. The retail side is most likely lower.

“Amazon is looking to make savings and has the muscle to achieve them. That may not be the case for e-gaming, where margins are low because the payout to the customer is increasingly high due to competition. Markets adapt and the M&A that we have seen of late is likely to accelerate so as to achieve scale”, he concluded.

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