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In the News

Swinton closes branches as consumers move online

Graham Watson

28th April 2017

Although there are macroeconomic implications, and negative multiplier effects associated with this news from Swinton Insurance, I think that it's more pertinent as a commentary on the changing nature of the market.

I was amazed to hear of how many branches that Swinton had, and how many it's closing. I don't think I've ever bought insurance in-branch. Over the phone, yes, at one time; online, increasingly, and then I occasionally use the phone to chase a better deal. 

But it is clear that the market has changed and the online business model changes the cost structure of the firm reducing fixed costs. I hope that top year economists are able to discern what this means for the equilibrium level of output of a firm. It's not a straightforward as it seems.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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