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Retailers 'to increase prices by more than VAT rise'
Many retailers are planning to use next month's rise in VAT to "mask" more extensive price increases, a survey by accountancy group KPMG has claimed.
It said 60% of retailers and consumer product manufacturers planned to increase their prices over and above the VAT rise from 20% from 17.5%
It added that across all industries, 40% of UK firms planned to do the same. KPMG spoke to 200 senior managers.
A British Retail Consortium spokesman said the report was "nonsense".
Martin Scott, partner at KPMG Performance & Technology, said that as many retailers and consumer goods manufacturers had needed to discount intensively in recent years to win over wary consumers, the intention to now raise prices was "an understandable reaction".
He added: "But, the timing must be right. In today's price-sensitive market, any increases may well have a damaging effect on sales volumes. Firms need to understand the overall impact on profitability."
Richard Dodd, head of media at the British Retail Consortium, said 2011 would likely be even harder for UK retailers than 2010.
More from source: BBC News - Retailers 'to increase prices by more than VAT rise'
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It makes sense really - since it is a planned tax raise it would mean that it will be excluded from official inflation figure next year, I mean, why not - it's a planned tax raise right?
Many retailers are planning to use next month's rise in VAT to "mask" more extensive price increases, a survey by accountancy group KPMG has claimed.
It said 60% of retailers and consumer product manufacturers planned to increase their prices over and above the VAT rise from 20% from 17.5%
It added that across all industries, 40% of UK firms planned to do the same. KPMG spoke to 200 senior managers.
A British Retail Consortium spokesman said the report was "nonsense".
Martin Scott, partner at KPMG Performance & Technology, said that as many retailers and consumer goods manufacturers had needed to discount intensively in recent years to win over wary consumers, the intention to now raise prices was "an understandable reaction".
He added: "But, the timing must be right. In today's price-sensitive market, any increases may well have a damaging effect on sales volumes. Firms need to understand the overall impact on profitability."
Richard Dodd, head of media at the British Retail Consortium, said 2011 would likely be even harder for UK retailers than 2010.
More from source: BBC News - Retailers 'to increase prices by more than VAT rise'
----
It makes sense really - since it is a planned tax raise it would mean that it will be excluded from official inflation figure next year, I mean, why not - it's a planned tax raise right?
