Pass it on

Next Monday VAT drops to 15% and already the media are speculating that not all retailers will be passing on the 2.5% reduction to customers.

 

Those who don’t will probably be thinking it is a small reduction that won’t have enough of an impact on price to alter consumers spending decisions, so they may as well keep the 2.5% to boost their own figures.

 

The problem with taking that view is that it goes against the spirit in which the Chancellor made the reduction. It has been done to help lower prices and stimulate the economy and whether you agree with this measure or whether it will work is irrelevant.

 

Ultimately all retailers need to show willing and pass it on. Those who don’t risk being exposed as being greedy and in the current climate any negative publicity should be avoided at all costs.

 

What retailers can do is be upbeat about the reduction and make a big point of telling customers that “We’re cutting prices by 2.5%.”

 

Yes the reduction is small but by showing willing and passing on the saving at the very least the retailer will be generating goodwill with their customers.