Shoppers snap up purchases before VAT rise hits
Shoppers are snapping up large flatscreen TVs and other big ticket items as they make the most of the New Year sales before next week’s rise in VAT.
Electronics goods and particularly TVs are selling strongly ahead of the rise in sales tax to 20 per cent on Tuesday, which will add an extra 2.5 per cent to the price of many goods, say retailers.
Comet, Currys and other stores have stimulated demand by knocking hundreds of pounds off the cost of some older LCD and plasma screens.
Such was the demand that by yesterday the country’s biggest department store, John Lewis, had sold out of all three major marked down LCD TVs on its website, a 42-inch Philips, 32-inch Panasonic Viera, and a 26-inch own-brand, and was also experiencing higher than expected demand for other sets.
“It’s been an aweseome sale period for IT and televisions. TVs in particular have flown out of the door. Many of the lines we’ve brought in for the sales have sold out already,” said Lesley Ballantyne, John Lewis director of operational development.
“We’ve been busier in our technology department than in the days before Christmas.” Across the chain, which has 28 full-line department stores, 12 recorded their best ever trading day on the first day of its sale.
At Comet, there was strong demand for a 32-inch Sony Bravia TV reduced by £147 to £299, and a 50-inch LG LCD TV at £499, a saving of £300.
A Comet spokeswoman said: “The sale has been very busy. But we expected it to be busy because of the VAT rise and because of pent-up demand caused by the weather. TVs have been one of the best-selling lines.”
Other gadgets selling well were iPads and the Kindle - the best-selling gift on Amazon.co.uk this Christmas.
Selfridges reported shoppers queueing for luxury fashion brands such as Louis Vuitton, Chanel, and Prada yesterday, three days into its sale.
“All the big ticket items are selling strongly,” said a spokeswoman. “The most successful areas are women’s accessories and luxury shoes. TVs and technology are selling well.”
Research by an online shopping site had predicted shoppers would spend even more money than usual in the New Year sales to beat the VAT rise. Almost one third of 1,004 respondents surveyed by PriceGrabber.co.uk had planned to buy big ticket item. “In previous years, Christmas and January sales have been popular times to purchase big-ticket items. According to our research, consumers that plan to increase their spending pre-VAT are focusing on big-ticket purchases like home furnishings and computers in order to avoid paying the increased VAT on these items,” said its head Justin Sedgmond.
But the splurge may leave pub landlords and restrateurs experiencing a slower January than usual, he warned. “After the VAT increase, consumers will be reducing purchases in some same big-ticket item categories and non-essentials like evenings out.”
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