Luxury lingerie retailer Pudding has bucked the trend among independents by implementing the Chancellor’s reduced VAT rate and passing the benefits on to customers.
Pudding, of The Walk in Reading, Berkshire, reduced its prices according to the new VAT rates within one minute of the Chancellor’s announcement last week, and informed customers by putting signage up in store.
Co-owner Paul Masters said: “[The rate cut] won’t have a huge impact, but we shouldn’t hang on to the benefits.”
Masters added that the media was likely to report negatively on retailers who don’t pass on the VAT cut to their customers. He said: “I want to be able to look my customers in the eye and say we’ve done it.”
Last week, independents polled by Drapers slammed the VAT cut as an out-of-touch move by the government, which they did not plan to pass on to customers (Drapers, November 29).
Masters said the reaction from customers was likely to be mixed. “One customer came in this week and said: ‘Finally, I’ve seen some benefit.’ But there is no doubt that a proportion of shoppers wouldn’t notice the difference,” he said.
He added that it was too early to tell whether the cut would entice shoppers to spend. “If it is true that this will inject £12 billion into the economy, then there will probably be some short-term benefits,” he said.
Masters said trading at Pudding was holding up but was not as buoyant as last year. “We’ve only been open for 15 months so we’re slightly cushioned,” he said. “We’re seeing modest growth and not hanging on to huge increases from previous years.”
Pudding stocks between 15 and 20 brands such as La Perla, Lise Charnel and Marie Jo.