The current credit lending crisis has put pay to many plans to spend on luxury items. For many families this has meant delaying or cancelling the purchase of new cars, holidays or home improvements. Across the UK, retailers of 'high ticket' goods and services have felt the crunch more than in any other sector, mainly due to a difficulty in sustaining the high turnover they once enjoyed.
Braeg Heneffe, general manager at Kitchen Kitchen Ltd, an online retailer of luxury kitchen appliances, comments that the recent reduction in VAT would have been too little too late: "We saw problems in our market sector way back in January of 2008. People were starting to be more cautious about the brands they chose, and were more keen on downgrading to cheaper models. This has not been the case for as long as I can remember in the last decade, and then the slump in sales started before Summer."
He went on to add: "When a family need to be more frugal, a 2.5% reduction in the sales tax is not carrot dangling in front of them- most people wouldn't have known the cost of our appliances in the first place".
One thing seems certain, and that is it's almost impossible to gauge the impact of this kind of government incentive, with there being no comparable figures. The reduction in VAT may have helped maintain a few sales for each retailer, but it seems like a drop in the ocean compared to the economic downturn the country is now enduring.
News source: http://www.internetkitchenappliances.co.uk/
