15 is the new 17.5

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15 is the new 17.5
Good Grief.
25/11/08

During one of the most important retail weeks of the year, the Government have taken the astounding initiative of reducing VAT by a small amount, effective from next week. Customers can now revel in the entirely incorrect assumption that prices may be lower next week, and avoid going shopping this week, which can only dent Christmas sales.

At a time when the cost of importing (which is directly applied to the retail price of goods) has increased by up to 35%, I am sorry to inform the government that 2.5% is not going to make a blind bit of difference to anybody.

Why won't retail prices go down next week?

1. Retail prices have to go up because the cost of goods has gone up
2. Retailers don't have time to re-price every item they are selling during their busiest time of year
3. Retail prices are worked out according to a standard mark up based on what a company needs to make to cover their overheads and make a profit, and then adjusted by, say, 3 percent to make a 'nice' price like 59.95. A 2.5 percent decrease in VAT is not capable of making a difference to prices across the board, because most prices are already adjusted by more than that amount.

Go out and spend what you can afford! Now, tomorrow, whenever!
But don't get into any more debt.

It's great that the Government have gone ahead and made this change (which will affect accounting across the board, and has been made in the middle of a financial quarter) without apparently consulting the retail industry to find out what the effects are likely to be.

I have noticed my blog has become more and more boring with every addition to it, so sorry about that. This one was going to be about Ricky Gervais, but the VAT thing annoyed me more. Look forward to the next installment, which will hopefully cover the shortfalls of Extras.

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Comments about This Article

I hate Daniel Craig. He's a right wanker. Comment By: P. Brosnan, 02 Dec 2008, Rating: 3/5

I am David Bren...I mean, Andy Millman and I know famous people. Comment By: Ricky Gervais, 25 Nov 2008, Rating: 5/5

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