If you have been brave enough to venture out into the sales this year you may be a little disappointed. Major retailers are reporting that their sales savings will not be as impressive as last year’s due, in part, to the recession and the further restrain on consumer spending likely to be caused by the increase in VAT in the New Year.
I think this is slightly misleading in that the change in VAT will have little effect on most of the main high street retailers. However, they do understand that to the end consumer, the extra 2.5% charge in VAT will have a significant effect on the overall price of high value goods such as TV’s and household furniture, and will ensure that the high street is busy this winter sale period.
So with another bumper year of sales well underway, has the end consumer really understood the economic client of 2010?
So VAT will change little for business but it’s the first sign that the cost of living in the UK is set to rise, and I believe this will be part of what may be a difficult year for consumers – and their suppliers.