Nearly a third of British consumers plan to panic-buy prior to the VAT increase
New survey data reveals one in two consumers plans to reduce his or her spending post-VAT increase.
British families have started bracing themselves for increased costs of living. New survey data (1,004 respondents; conducted between 8 October 2010 and 18 November 2010) from PriceGrabber.co.uk, a part of Experian, reveals nearly a third of British consumers plan to make panic purchases of
big-ticket items prior to the VAT increase next week, which will be followed by a period of reduced spending on non-essentials.
The survey revealed that 47% of respondents said they would spend money on home furnishings and appliances prior to the VAT increase, 42% plan to spend money on desktop computers/laptops, 40% would purchase other consumer-related electronics and 38% said they would spend extra money on clothing and shoes.
Consumers are divided when it comes to cutting back after the VAT increase with 50% of consumers planning to cut back on spending and 50% not planning to cut back.
Post VAT increase 29% of consumers said they will spend less on jewellery and watches, 27% will cut back on home-furnishing and appliance purchases.
25% of consumers intend to decrease their spending on non-computer-related consumer electronics after the VAT increase and 24% revealed they would reduce spending on clothing and shoes.
Justin Sedgmond, Head of PriceGrabber.co.uk, said, “In previous years, Christmas and January sales have been popular times to purchase big-ticket items. According to our research, consumers that plan to increase their spending pre-VAT are focusing on big-ticket purchases like home furnishings and computers in order to avoid paying the increased VAT on these items. After the VAT increase, consumers will be reducing purchases in some same big-ticket item categories and nonessentials like evenings out.”
