VAT Price Reductions on Popular Toys

VAT Price Reductions on Popular Toys

Just what we needed in the frantic few weeks before Christmas.  A little bit of extra work, courtesy of the Chancellor.  We can’t knock his motives however and are all in favour of anything that gets the flagging economy going again.  This bulletin explains what we at Mulberry Bush are doing in response.

We are a small business and whilst we hold a lot of stock of our wooden and traditional toys (too much says our accountant) we do not buy all our Christmas stock in at the beginning of the season.  Space alone wouldn’t permit.   We do secure as much stock as we calculate we will need, and we do all that we can to fix the price at which we buy, but this year that  has been harder to do.

We have always striven to keep our prices competitive and often work to very tight margins ourselves, and now that the prices to us have begun to rise we have started to see those tight margins erode further.  The reduction in VAT has sparked a full price review for us at a rather unfortunate time, given that next week will probably be the busiest of the year and also because all our prices are published in our paper catalogue which is current until the end of December.

With time so short in which to implement the change there seems little point fiddling around with low priced items.  The saving on a £4.99 toy would be 10 pence.  Better in your pocket than ours you might say, but as we have to consider the full make-up of the price of each product we thought it best to start our full review with the higher priced items and work our way down.  We have introduced those new prices over the weekend of 29th / 30th November – prior to the date when VAT changes.

Come January 2010 when we will have to go through this exercise again (the VAT rate reverts to 17.5% then).  I only hope people remember why prices will have to go back up, but in all probability retailers will do everything they can to keep their prices competitive and at the well-known price points that end in £.99.

Be Sociable, Share!

    Leave a Reply

    Your email address will not be published. Required fields are marked *