Wilkinsons and VAT

  Graham. 21:26 11 Feb 2009

I emailed Wilkinsons as a regular purchase had a reduction at checkout to reflect the new VAT rate. But the next time when I did not get the reduction, I thought they had put the price up.

Here is their response:

Thank you for your email received regarding the cut in VAT.

Please find information below which I hope reassures you of our commitment to our customers.

The government introduced the suggestion of a reduction in VAT from 17.5% to 15%. The majority of retailers took this on board and applied the reduction at till point.

Wilkinson's as a company has decided not to continue to apply this but instead to reduce further lines throughout our store's, saving our customers much more in the long term and keeping us at the forefront of competitive prices with family values.

In order to comply with the reductions we would have had to change all of the scan labels in every store.

· The Cost to change all of the above would have exceeded £1 million

· The cost incurred by this would have resulted in Price increase's being passed onto customer meaning no longer a cheaper family friendly option but in line with other retailers, making the VAT reduction an effective non entity.

· The Company has immediately reduced the cost of the top selling 3,200 lines in store and promise to reduce further lines passing on the savings back to the customer via more competitive pricing in store throughout the year.

Pound land is just one of the other retailers who have pledged this same promise. We are looking out for the long-term benefits of our customers, meaning when the VAT rate is back up we will still remain one of the most competitive retailers in the marketplace.

  oresome 21:39 11 Feb 2009

"I thought they had put the price up."

They have! The rest is just window dressing.

There is no need to go to the expense of changing scan labels as they suggest. Simply continue to make the adjustment at the till point. Customers understand it a temporary measure.

I suspect they've concluded that they've wrung all the PR out of the reduction and can now quietly drop it.

  Kevscar1 05:02 12 Feb 2009

I bet if as suggested the government raises the VAT rate above 17.5% later they will have no problem changing the scan labels

  wiz-king 06:03 12 Feb 2009

The bar-code label on a product identifies the manufacturer and the manufactures product code. The price is set by the retailer on the EPOS (Electronic Point Of Sale) till, most manufacturers have a RRP but it does not get coded onto the bar-code.

  wids001 06:51 12 Feb 2009

A local hardware store near where I live still has all prices showing VAT at 17.5%.

However, once at the till a reduction of 2.5% is taken off the total price. The owner told me that in the light of this VAT reduction only lasting for 1 year it would have cost him a fortune to change all the price tags etc. etc.

Numerous notices throughout the shop also explain this.

So, if this trader can apply the reduction at the till, then so can Wilkinsons.

  Pine Man 08:18 12 Feb 2009

Why should Wilkinsons incur additional costs to introduce a government plan to ease the recession that all retail trade associations new wouldn't work and it hasn't?

  jack 08:47 12 Feb 2009

They have gone up in another way.

I purchase tissue products[Kitchen Towel -loo roll] from their own brand budget range.

The latest pack of kitchen towel is narrower thus not fitting the holder. I had to slide the discarded core into the new roll to get a fit.
This also means the now core is a slightly largeer diameter[less product on the roll].

  natdoor 08:55 12 Feb 2009

I bet that Wilkinson's are easily able to ensure that their VAT returns only reflect 15%.

Pine Man
As far as the reduction working is concerned, it will result in £12 billion loss to the Treasury over a year. That money will not disappear, it will be in the pockets of consumers, who can then spend it as they choose. The effects of this will only be seen over time as the small benefit from each transaction accumulates. I am rather surprised that all trade associations are unable to appreciate this.

  Pine Man 10:35 12 Feb 2009

'I am rather surprised that all trade associations are unable to appreciate this.'


  Stuartli 16:49 12 Feb 2009

The actual VAT reduction to the consumer is 2.31 per cent.

Hardly enough to get excited about for small purchases but, according to friends I have who own businesses, an infuriating additional operational cost burden and yet only valid for a comparatively short time.

How many people would have rushed to the shops if, say, M and S or PC World had proudly declared prices were being reduced by 2.31 per cent?

  oresome 18:33 12 Feb 2009

In real terms it's neither!

We're limited by the coinage denominations we use. It might be rounded up or down.

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