Cost of Living Crisis - Boots debuts 'Everyday' budget essentials range

Boots is launching a budget range, with everything priced below £1.50. It is a good applied example of how businesses adapt to the prevailing economic climate real incomes falling and recessionary fears deepening by the day.

This decision by Boots reflects two aspects of demand - firstly falling demand (with the associated drop in business revenue or turnover) and secondly the income elasticity of demand for certain products.

Certainly consumers will be switching from leading brand products to supermarket own brand, and this will reflect them altering their spending patterns in response to lower real incomes. This process is known as "trading-down" - in other words, people making a conscious decision to switch - perhaps temporarily - to cheaper substitute brands to bring down their cost of living.

Boots plans to offer toiletries such as shampoo, shower gel and toothpaste for under £1.

We saw this at work during the recession that followed the Global Financial Crisis. Businesses such as Boots are savvy enough to realise that if consumers are opting to trade-down, it is best for them that they do so in your own stores.

You might think about how this will affect certain sectors, like supermarkets, for example. To what extent is Boots a direct competitor to large-scale chains such as Tesco, Aldi, Lidl, Sainsbury and others?