Realistbear Posted December 21, 2010 Share Posted December 21, 2010 http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8214801/Consumer-confidence-on-brink-of-collapse.html Retail and Consumer Consumer confidence 'on brink' of collapse Consumer confidence was "teetering on the brink" of collapse in December, a survey showed, and only the rush to buy pricey items before the VAT rise stopped sentiment hitting its lowest level in more than a year. Fear coupled with the reality that austerity may well have some impact on jobs are key triggers. So far, it has been a phoney war scenario but that looks like it may chnage very soon. VAT at 20% may be the final straw to begin the downward spiral in house prices. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 21, 2010 Share Posted December 21, 2010 The new year will be interesting. Will the VAT rise have a big impact on demand? Quote Link to comment Share on other sites More sharing options...
Realistbear Posted December 21, 2010 Author Share Posted December 21, 2010 (edited) The new year will be interesting. Will the VAT rise have a big impact on demand? Even though it will only be 2.5% I am sure I am one of millions who made a purchase this month instead of waiting until January. Just bought a Pioneer Blu-ray Home Theatre system for £249 reduced from £400 as it seems that the home theatre market is saturated. Thinking about it, my rent has dropped by 60% this year (moved in with friends in a separate annexe), I have finally bought myself a large screen TV for hundreds less than they were in January and still hold mostly $. I am in the midst of a strong deflationary vortex! Edited December 21, 2010 by Realistbear Quote Link to comment Share on other sites More sharing options...
Realistbear Posted December 21, 2010 Author Share Posted December 21, 2010 Dont you ever question the fact that these companies can still make profits on goods at vastly reduced prices and thus wonder why they can get away with profiteering with such huge markups? Its the UK premium. With huge reductions we are starting to fall into line with the rest of the world and reasonable pricing. Houses just need to go the same way and Roberta is your Aunt! We all know it makes sense. Quote Link to comment Share on other sites More sharing options...
MrPin Posted December 21, 2010 Share Posted December 21, 2010 I'm pretty sure the 2.5% VAT rise has pushed purchases forward! Even though 2.5% on a £300 TV isn't really much! Quote Link to comment Share on other sites More sharing options...
erranta Posted December 21, 2010 Share Posted December 21, 2010 Dont you ever question the fact that these companies can still make profits on goods at vastly reduced prices and thus wonder why they can get away with profiteering with such huge markups? One of the main reasons we all have to pay so much in UK is the huge rentals paid to the parasitic hidden building owners. The way contracts are drawn up only yearly increases in rent are stipulated - they never take into account shopkeepers varying income so they just default by eventually going bust. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted December 21, 2010 Author Share Posted December 21, 2010 Another reason for our rip-off prices is the ubiquitious "middle man." Most car retailers go through a middlelayer of profit before you reach the manufacturer (another reason why servicing is so high and so poor in the UK--no factory accountability). Recently, iconic guitar manufacturer, Gibson (the very name sends tingles of excitement down many a spine) started selling direct to retailers cutting out the middleman. The result: prices very near or even below retain in the US where a lot of Gibson gear is made. More of this and the problem will be sorted. Quote Link to comment Share on other sites More sharing options...
porca misèria Posted December 21, 2010 Share Posted December 21, 2010 One of the main reasons we all have to pay so much in UK is the huge rentals paid to the parasitic hidden building owners. The way contracts are drawn up only yearly increases in rent are stipulated - they never take into account shopkeepers varying income so they just default by eventually going bust. NuLab's tax relief for empty commercial property finally due to end in April. So a bit of pressure for landlords to be more reasonable. Quote Link to comment Share on other sites More sharing options...
A.steve Posted December 21, 2010 Share Posted December 21, 2010 The new year will be interesting. Will the VAT rise have a big impact on demand? I don't think that the VAT rise will have a particularly noticeable impact on retail prices - but it will have a significant effect on sentiment. Paying an extra £2 for every £10 feels noticeable - at least in part because it is easily calculated. I think this will have a big impact on people's motivation to buy big ticket items... cars, conservatories, massively-over-specified home entertainment - etc. I expect this to be very bad news for UK retailing. I'd expect an uptick in second hand purchases and black market trade. Quote Link to comment Share on other sites More sharing options...
DownsizingDiva Posted December 21, 2010 Share Posted December 21, 2010 I don't think that the VAT rise will have a particularly noticeable impact on retail prices - but it will have a significant effect on sentiment. Paying an extra £2 for every £10 feels noticeable - at least in part because it is easily calculated. I think this will have a big impact on people's motivation to buy big ticket items... cars, conservatories, massively-over-specified home entertainment - etc. I expect this to be very bad news for UK retailing. I'd expect an uptick in second hand purchases and black market trade. I thought VAT was only rising by 2.5%? £2 in every £10 is 20%. Now that we WOULD notice. Quote Link to comment Share on other sites More sharing options...
Timm Posted December 21, 2010 Share Posted December 21, 2010 I don't think that the VAT rise will have a particularly noticeable impact on retail prices - but it will have a significant effect on sentiment. Paying an extra £2 for every £10 feels noticeable - at least in part because it is easily calculated. I think this will have a big impact on people's motivation to buy big ticket items... cars, conservatories, massively-over-specified home entertainment - etc. I expect this to be very bad news for UK retailing. I'd expect an uptick in second hand purchases and black market trade. Has someone stolen A.Steve's log in? Quote Link to comment Share on other sites More sharing options...
SarahBell Posted December 21, 2010 Share Posted December 21, 2010 I was thinking about this over lunch. Those with cash won't spend it. It's not getting any interest in the bank and despite inflation fears, if we spend savings they are gone. Up the rate on savings and those with money might spend a bit. Those without money should always refrain from spending. Quote Link to comment Share on other sites More sharing options...
A.steve Posted December 21, 2010 Share Posted December 21, 2010 Has someone stolen A.Steve's log in? Nope... I realise that this increase is only another 2.5%, but I expect the public reaction to be less rational. I think that 17.5% was clever as it dissuaded people from thinking about VAT. At 20%, VAT becomes more 'obvious' and avoidance will likely become more widespread a preoccupation. Quote Link to comment Share on other sites More sharing options...
Timm Posted December 21, 2010 Share Posted December 21, 2010 Nope... I realise that this increase is only another 2.5%, but I expect the public reaction to be less rational. I think that 17.5% was clever as it dissuaded people from thinking about VAT. At 20%, VAT becomes more 'obvious' and avoidance will likely become more widespread a preoccupation. Ahhh. I understand now. RealistBear had stolen my brain. Quote Link to comment Share on other sites More sharing options...
bobthe~ Posted December 21, 2010 Share Posted December 21, 2010 I was in blockbusters on Saturday and handed over 10 quid for their 3 for 10 pound offer, only to be told it was 10.50. didn't it used to be 10 pounds? I asked. "Yes but they have increased it to pre-empt the VAT rise." A good few of those people spending now are already paying the new VAT rate... Quote Link to comment Share on other sites More sharing options...
worzel Posted December 21, 2010 Share Posted December 21, 2010 I don't think that the VAT rise will have a particularly noticeable impact on retail prices - but it will have a significant effect on sentiment. Paying an extra £2 for every £10 feels noticeable - at least in part because it is easily calculated. I think this will have a big impact on people's motivation to buy big ticket items... cars, conservatories, massively-over-specified home entertainment - etc. I expect this to be very bad news for UK retailing. I'd expect an uptick in second hand purchases and black market trade. How do you work that out? Quote Link to comment Share on other sites More sharing options...
kilroy Posted December 21, 2010 Share Posted December 21, 2010 I was in blockbusters on Saturday and handed over 10 quid for their 3 for 10 pound offer, only to be told it was 10.50. didn't it used to be 10 pounds? I asked. "Yes but they have increased it to pre-empt the VAT rise." A good few of those people spending now are already paying the new VAT rate... but isn't the VAT increase only going to increase a GBP10 item by 25p? I hope you pointed this out to them, before you walked out empty handed. Quote Link to comment Share on other sites More sharing options...
porca misèria Posted December 21, 2010 Share Posted December 21, 2010 but isn't the VAT increase only going to increase a GBP10 item by 25p? I hope you pointed this out to them, before you walked out empty handed. 21p actually (being 2.5% of an underlying £8.51 ex-VAT price). Quote Link to comment Share on other sites More sharing options...
bobthe~ Posted December 21, 2010 Share Posted December 21, 2010 but isn't the VAT increase only going to increase a GBP10 item by 25p? I hope you pointed this out to them, before you walked out empty handed. Well we don't go there very much any more. It used to be 4 for 10 pounds, and we didn't walk out when that deal ended and it went to 3 for 10. they change their prices and deals all the time and I suspect when the pressure is on they will drop back down again I guess it is up to them what they charge and up to us to decide whether we want to buy from them, or do without, or go somewhere else, like Sky BoxOffice. Quote Link to comment Share on other sites More sharing options...
pathfinder Posted December 21, 2010 Share Posted December 21, 2010 from a personal perspective Xmas 2007 - 3 years ago joint income 70-80k. We still had a ton of cash left over after overpaying like crazy. £150 to help cover parents xmas food/drink bill. £50 paid for chinese. £50 curry for brothers and myself . £350 on presents. Xmas 2010 - 2 NMW jobs life style not much different as spare cash was used for overpaying. £30 on presents. Bank of Pathfinder is closed ^^. Quote Link to comment Share on other sites More sharing options...
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