Amazingly M&S is repeating its 20%-off sale day tomorrow, Thursday. This is a clear indication of the struggle that retailers, including M&S, are having tempting shoppers to buy their vast quantities of stock in the lead up to Christmas.
Debenhams are also running another 3-day sale from today. Michael Sharp, Debenhams deputy chief executive, said ‘We’re back by popular demand – it’s as simple as that’. Debenhams however are not passing on the VAT cut to shoppers until next week. This is despite the fact that Alistair Darling announced that the VAT drop from 17.5% to 15% would take effect from 1 Dec. So whilst there will be savings at Debenhams these will not be as great as if the VAT cut had been applied. Surely this will result in negative PR and one must question Debenhams judgement on this.
According to a spokesman for the British Retail Consortium ‘Most retailers, particulalrly major retailers, are passing the VAT cut on to customers’ and this includes M&S. Many businesses introduced the VAT rate cut last week to try and attract weekend shoppers. Some shops that are passing on the reduction are initally applying the cut at the till and they have two weeks to bring their store and advertised prices into line.
Whether because of the VAT cut or retailers sales days, this is certainly shaping up to be a serious price war as stores desperately try to get consumers to part with their Christmas money.