JANUARY’S VAT increase has led to traders across the town recording mixed results for the first month of the year.
The Government inflated VAT from 17.5 per cent up to 20 per cent on January 4, and some experts predict the rise will cost UK retailers £2.2 billion during the first quarter of the year.
But while businesses in Daventry admit trade is tough, the increase hasn’t led to a massive reduction in custom.
John Gaul, who owns Exit for Men on the High Street, said: “We’ve not seen a big difference, and since the New Year sales have actually been quite good.
“Business is the same as this time last year on a like for like basis which is a positive thing given the climate. But on the other hand our profit margins are being squeezed because we are running sales and so are not getting the full price for our goods.
“Generally the High Street is still very quiet and it’s only the sales that are bringing people in. It’s still very tough but nobody has really been talking about the VAT rise.
“I think spring will be more of a telling point – when the sun is shining and more people are out and about.”
Matt Newman, who runs Fridays bar on the High Street, is also experiencing a tough marketplace.
But he believes the key this year is to think of new ways of getting people through the door.
He said: “We are constantly getting letters from the brewery telling us how other factors are putting their prices up, so most people are feeling the knock-on effects and having to put drinks prices up.
“But we are doing the opposite and lowering our prices to try and encourage people to come out.
“January is always quiet and with VAT going up we decided that was the best thing to do, and I think it has helped. Our profits are lower because we have had to absorb the VAT rise but at least people are coming out. It’s just about thinking of different ways to boost trade at the moment.”
Peter Harper, who owns Knightleys, Someplace Else and Harpers on Sheaf Street, added: “Trading has been tough but I don’t think it’s made a lot of difference. The comments we are getting from customers are more about how fuel costs are impacting them. Our monthly trading figures have followed the pattern of last year. The third week of January is always the worst trading week of the year and last week was pay week so we saw an improvement.”