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Businesses Unaffected by VAT Hike
Listed under: News
Published: Monday, February 08, 2010
The effects of the VAT rise this January have been minimal, seeing consumers continue to splash out on their everyday purchases and refuse to cut-back, according to a new report from leading market research company, GfK NOP.
Despite the troubled economy, UK shoppers continued to splash out on their favourite non-essential purchases in 2009, with the number of people reducing their everyday expenditure dropping significantly year-on-year.
Spending on clothing, entertainment and eating out all showed growth, with the number of consumers cutting-back falling 17%, 12% and eight percent respectively. Demand for holidays and short breaks also remained strong, seeing 14% fewer consumers choose to reduce their spend.
The research suggests that the impact of the VAT hike this January has been small, with 63% of consumers saying it would not affect their spending in 2010. However, the report does reveal that shoppers are making their purchases more wisely, with 32% of people admitting they have bought products earlier to avoid the added costs of the rise.
Commenting on the positive findings, Ivan Browne, director at GfK NOP, says, “These results most definitely point to a cautious optimism amongst the UK public, with far less cutting back in 2009 compared to 2008. Importantly, these findings are based on what consumers actually did, rather than what they predicted they would do, which gives us a far more accurate picture.”
He adds, “Attitudes towards the VAT increase also seem to go against the popular notion that it will be bad news for the high street, and similarly suggest reasons to be positive.”
How has the VAT rise affected your business this year? Email your thoughts to .(JavaScript must be enabled to view this email address)
Despite the troubled economy, UK shoppers continued to splash out on their favourite non-essential purchases in 2009, with the number of people reducing their everyday expenditure dropping significantly year-on-year.
Spending on clothing, entertainment and eating out all showed growth, with the number of consumers cutting-back falling 17%, 12% and eight percent respectively. Demand for holidays and short breaks also remained strong, seeing 14% fewer consumers choose to reduce their spend.
The research suggests that the impact of the VAT hike this January has been small, with 63% of consumers saying it would not affect their spending in 2010. However, the report does reveal that shoppers are making their purchases more wisely, with 32% of people admitting they have bought products earlier to avoid the added costs of the rise.
Commenting on the positive findings, Ivan Browne, director at GfK NOP, says, “These results most definitely point to a cautious optimism amongst the UK public, with far less cutting back in 2009 compared to 2008. Importantly, these findings are based on what consumers actually did, rather than what they predicted they would do, which gives us a far more accurate picture.”
He adds, “Attitudes towards the VAT increase also seem to go against the popular notion that it will be bad news for the high street, and similarly suggest reasons to be positive.”
How has the VAT rise affected your business this year? Email your thoughts to .(JavaScript must be enabled to view this email address)
