Forthcoming VAT hike could boost Christmas sales

| December 13, 2010 | 0 Comments

The British Retail Consortium (BRC) has revealed some optimism among retailers for the Christmas period.

Many believe the Christmas period will be no worse than last year - despite consumers being fearful of the Government’s spending cuts and unemployment.

According to the BRC’s snapshot of 17 major retailers, which represents up to 51% of the sector by turnover, established that more than one third of firms believe trading will be better than last year, while 29% said they believed it would be the same.

However, a balance of 36% are fearing the worst, highlighting the recent bad weather and the financial squeeze on households as the main reasons.

The report found 71% of retailers think the forthcoming VAT hike will bring forward the purchase of big-ticket items.

Commenting on the survey, BRC Director General Stephen Robertson, said: “It’s reassuring to see a majority of retailers believe Christmas sales will be at least as good as last year … But considering inflation is now at 3.2 percent, growth of anything less than that would be a real-terms fall.”

However, the fact remains that retailers are concerned about higher taxes and believe the forthcoming Government cuts will dent consumer spending.

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