UK retailers say VAT-cut not working
Weeks after the UK government slashed the VAT rate from 17.5% to 15% major retail chains claim it just doesn't cut it
6 January 2009
Several large retail chains in the UK have said that the exchequer’s cut in VAT to 15% before Christmas has not had the desired effect of dramatically boosting consumer spending.
Analyst Anita Sharma Manan, Experian FootFall, commented that consumers have become immune to discount bonanzas and other sales tactics being employed in force by retailers during these new challenging times, and have not responded to the reduction in VAT the way the British government had hoped.
According to Sharma Manan, high street sales reached a peak two weeks before the VAT cut and have seen a decline in footfall drive since then.