According to a recent report from the Confederation of British Industry (CBI) retail sales for August are down and, despite hopes that the recession is nearing an end, the future for retail is not looking hopeful.
A survey of retailers carried out by the CBI shows that more of them are seeing a dip in sales and hopes of a recovery in September are bleak.
A separate survey by PricewaterhouseCoopers shows that the cut in VAT did not lure people into spending money. People claimed that cuts in their income and economic uncertainty were more powerful motivators against spending.
The cut in VAT was generally considered to be a failure by retailers. For many of them the cost in repricing goods far outweighed any benefit in increased sales.
France adopted a bolder more drastic move last month when Nicholas Sarkozy announced the TVA (France's VAT equivalent) on food and soft drinks would be reduced from 19.6% to 5.5%. With this approach a meal out for two typically costing 40 Euros could be reduced by about 5 Euros.
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