UK games retailers look likely to swallow the recently announced VAT hike, fearing gamers will avoid their stores and shop elsewhere. ‘Senior retail figures’ have told MCV that they will absorb the increase when it comes in to effect this January. Director general of the Entertainment Retailers Association, Kim Bayley, fears the long term effects of the tax;
“This is a big increase which is bound to have an impact on retail. Government action often produces unintended consequences and if the result of this rise was to lead to more closures and interfere with the ecology of entertainment retailing, no one should be surprised if there is a outcry.”
The MD of Activision UK, Andrew Brown, has called for retailers to be more flexible with their pricing. Rather than using £5 increments, he suggests £40.84 may become the new £39.99.
“Perhaps the VAT change will drive retail to re-think the large price steps being used.” he said.