Have you noticed a price increase in your weekly shop?
If you have then you are part of a large majority of consumers who have found that supermarkets and other stores have hiked up their prices by more than the 2.5% VAT increase. Stores are expected to inflate their prices by up to 8% as unsuspecting customers go about their weekly shop. By law retailers do not have to change their in store label prices until February 1st the latest, so they are taking advantage of this and hiking up their prices more than they should.
Unfortunately you cannot do anything about this as many store do have notices up stating that their in store label prices may not yet reflect the new VAT increase. Although the average weekly isn’t supposed to increase by that much I and many other shoppers have found that since the VAT increase some products have gone up far too much!
Some stores have decided not to increase their prices to include the new increase and will instead cover the 2.5% keeping their prices lower than other stores. But when demand gets too high they too will be forced to reflect the VAT increase but may add a little more to make a profit.
Just before the VAT increase petrol went up and then with the VAT increase it went up by a further 2.7p a litre, the average price for a litre of petrol is £1.25p a litre and with another rise indicated in fuel prices in April it’s only going to get more expensive.
At present children’s clothing, newspapers and food are not subject to VAT but many shoppers have found that many items at the supermarket have increased so is this just a coincidence? On demeaning part of the VAT increase is that all the stock that was bought under the 17.5% VAT conditions will now be re-sold at the higher rate, therefore retailers will be making a profit. Everyone knows that retailers buy in bulk therefore make a profit on goods sold anyway. So by increasing the VAT it will be the consumer that loses out whilst the retailers line their pockets.
Some experts believe that as the nation continues to grip harder on their finances retail prices will be a joke as people will not pay, instead many will boycott or buy things that ‘fell off the back of the lorry’ as a way to save money and make a stand. Most goods are overpriced anyway and the only way retailers make a sale is because people are willing to pay the silly advertised prices. The sooner everyone wises up and refuse to pay the better and cheaper products will get.