VAT worries
Published: 01 September, 2010
A survey of 2,863 UK consumers, conducted by customer experience researchers Retail Eyes, found that consumers are split almost 50:50 over whether the VAT rise will change their spending habits
More than half (52 per cent) said that the increase won’t affect their spending. Nevertheless, over eight out of 10 shoppers said they would be more tempted by retailers that decide to put a freeze on any VAT rise.
Simon Boydell, marketing manager for Retail Eyes explained: “It appears from our survey results that consumers haven’t made a conscious decision yet as to whether the VAT rise will change their spending.
“With recent news from The British Retail Consortium (BRC) claiming consumer confidence has fallen for the first time in a year this should come as some relief to retailers. But there is still a lot of uncertainty among shoppers so retailers do need to consider ways to entice consumer spending both before and after the rise on January 4.”
And Boydell pointed out that this indicates a potential upside for retailers that are prepared to adopt a flexible approach: “Our results show there’s real opportunity for retailers to increase footfall and spend before the VAT hike with a high proportion of consumers planning to make a lot of additional big ticket purchases this year.”
Six out of 10 consumers claim the VAT rise won’t affect how much they spend this Christmas while 38 per cent of consumers are planning on making additional purchases before the VAT rise. Of the 38 per cent, most people (66 per cent) plan to buy electrical goods such as TVs and radios and 24 per cent will purchase white goods.
