Tuesday, 6 July 2010

UK Retailers Will Need To Suffer The VAT Increase

A report over at industry trade magazine MCV details how retailers will have to take on the VAT increase next year in fear of consumer revolt, meaning they'll lose even more on software sales. Kim Bayley, director general of the Entertainment Retailers Association commented:
“This is a big increase which is bound to have an impact on retail."

“Government action often produces unintended consequences and if the result of this rise was to lead to more closures and interfere with the ecology of entertainment retailing, no one should be surprised if there is a outcry.”
Activision’s UK MD Andrew Brown added that retailers will have to re-think their pricing strategies:
“Like so many other sectors, price points are seen as key in front of the consumer."

“In this industry retail tends to work in large price steps rounded to the nearest £5. Is it likely £39.99 will become £40.84? Perhaps the VAT change will drive retail to re-think the large price steps being used.”

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