VAT Hike!

Originally Posted by squirrel_hunter

Nope they will just put the price up to 'reflect the VAT rise' which will also include a little bit more. The same way as the VAT reduction. On the high street the price went down slightly before people started to forget and the price remained the same, a nice little earner for the shops as its only when you hit economy of scale do the changes have a noticeable difference.

Did the prices really go down? As far as I remember, the prices stayed the same, and the companies pocketed a bit more money, the intention being they would then be able to hire more staff, and the psycological affect of people thinking, ooh i'll save money if I buy now meant more people buying, but when the VAT went back up, most prices didn't change, because they had never gone down in the first place.

The problem now is, the majority of companies are finding it hard, especially those with a large high street presence and only a small share on the online retail industry, as more and more people buy online making the cost of owning a large premises less cost effective than it used to be.

I can't see anybody swallowing the VAT increase for a long period of time, more likely to increase costs to match VAT, increase costs to match inflation and increase costs to protect profit margins in a time when most people are trying to spend less, not more, meaning on some items we could see price rises of 10%...


Ooh the controvosy..

[G]

Originally Posted by EssexDave

Did the prices really go down? As far as I remember, the prices stayed the same, and the companies pocketed a bit more money, the intention being they would then be able to hire more staff, and the psycological affect of people thinking, ooh i'll save money if I buy now meant more people buying, but when the VAT went back up, most prices didn't change, because they had never gone down in the first place.

The problem now is, the majority of companies are finding it hard, especially those with a large high street presence and only a small share on the online retail industry, as more and more people buy online making the cost of owning a large premises less cost effective than it used to be.

I can't see anybody swallowing the VAT increase for a long period of time, more likely to increase costs to match VAT, increase costs to match inflation and increase costs to protect profit margins in a time when most people are trying to spend less, not more, meaning on some items we could see price rises of 10%...


Ooh the controvosy..

Displayed prices didn't change, because the cost associated with doing so far the sake of 2p or 4p difference was never worth it.

The bold part highlighted above just goes to show how much people will really notice it on everyday purchases.

Originally Posted by barwel1992

no idea on the date but im ordering £120 worth of gaskets and piston rings before it does go up

Coooorrrrr, watch out genius. You're really beating the system there Wouldn't wanna shell out the extra £3 now would you!

[squirrel_hunter]

Originally Posted by EssexDave

Did the prices really go down? As far as I remember, the prices stayed the same, and the companies pocketed a bit more money, the intention being they would then be able to hire more staff, and the psycological affect of people thinking, ooh i'll save money if I buy now meant more people buying, but when the VAT went back up, most prices didn't change, because they had never gone down in the first place.

Yes prices did go down. But not exactly as was intended. As G said items were not repriced due to the cost involved. What would have happened initially was the reduction was taken off at the till and this would have been shown on your receipt. However after a time this practice reduced as supposedly items were repriced to reflect the change. In reality people forgot and the companies simply used the reduction to make a little bit more, though they will never admit it.

Originally Posted by EssexDave

The problem now is, the majority of companies are finding it hard, especially those with a large high street presence and only a small share on the online retail industry, as more and more people buy online making the cost of owning a large premises less cost effective than it used to be.

This has been a problem for high street retailers for a number of years. However retailing even on the high street with the correct business model can still be very profitable.

Originally Posted by EssexDave

I can't see anybody swallowing the VAT increase for a long period of time, more likely to increase costs to match VAT, increase costs to match inflation and increase costs to protect profit margins in a time when most people are trying to spend less, not more, meaning on some items we could see price rises of 10%...

More or less. The same will happen with the rise as with the reduction. Initially the rise will be added on at the till point before tickets are changed, though this time the change will be higher than the VAT increase.

However as retailers have had the best part of a year to prepare for this I wonder how many are still trying to workout how they are going to deal with this VAT change again...

Just a guess this but I bet who will loose out? And it will not be the retailer!

I've noticed a few common items increasing in price the last couple of months, I think they're getting ready for the change in advance. M and S made a big fuss that the price of their underwear would be staying the same, but that's about the only thing I expect. When the spring collection comes out or whatever, how would you know if it's been increased as it didn't exist before? The big stores won't be worried.

Basically, if a retailer of manufacturer is targeting a price point of £49.99 or whatever, they'll just trim or scrimp somewhere else to get it there and retain the margin. It will all be evened out quite quickly I think. The Govt. getting a fifth of every pound you spend is pretty galling when they've taxed you already. Buy secondhand on the 'bay and stick it to the man eh.

Originally Posted by reeder

Coooorrrrr, watch out genius. You're really beating the system there Wouldn't wanna shell out the extra £3 now would you!

that £3 is £3 worth of something else i will have you know

Lol give it all to eBay! I'm sure they dont pay anything to the government! Adrenalife - I think you will find eBay make more than any retailer and pay the government tons if taxes.

If I were a shop I'd ensure my prices reflected the vat change it doesn't mean anymore profit fir them in fact they have costs involved in the change. Like I'm sure that if the government declared everyone got a pay rise - I'm sure you would make sure you got it!