Discounting boosting high street sales
Dec 16 2008
Aggressive discounting in the retail industry has led to a spike in sales, but the Value Added Tax (VAT) cut has contributed little to this, an expert states.
Donald MaxLeod, head of Sainsbury's credit cards at Sainsbury's Finance, says a lot of vendors have been more aggressive with their discounts, which is now paying off.
Retail sales figures from the Office for National Statistics show that by mid-November people had already spent 14 per cent more than the same time last year.
The average per-head spend had increased from £134.42 last November to £150.78 this year and six per cent of people have already spent over £500.
MaxLeod says the spike in sales is not likely to be the sign of an upturn in consumer finance or a willingness to spend, but is more of a seasonal upturn.
He states the publicity surrounding many of the retailers' sales has caused more people to buy.
MaxLeod adds that the tax cut was not enough to make consumers suddenly purchase more Christmas shopping as it was not large enough.
'It is something like 2.1 per cent. That isn't going to be sufficient to make you suddenly think: 'I am now going to buy that item',' he says.
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