Retailers question relevance of findings to jewellery industry.
January’s VAT increase failed to impact overall UK shop prices in February with non-food shop price inflation remaining level at 1.9% last month, according to the BRC-Neilsen Shop Price Index.
Neilsen Retailer Services senior manager Mike Watkins believes that the freeze in prices is the result of cautious retailers holding back on inflating prices in a tough market. He added: "Shoppers have been cautious since the start of the year so retailers are holding back on price increases wherever possible."
However, the BRC-Neilsen Shop Price Index does not break down its results for jewellery and watch retailing, and the slow in price inflation may not ring true in the industry.
Simon Johnson, owner of independent retail jeweller Marmalade, said: “If anything, most of our big-ticket items are up because of the price of gold and platinum.”
Stuart Laing, owner of store Laings of Glasgow and chairman of the Houlden buying group, believes that many retailers in the watch and jewellery industry did not pass the VAT increase on to customers but said that discounting has been rife to try and combat falling footfall.
“It is my belief that most jewellers did not re-price stock when the VAT went up, apart from branded stock,” he said. “Everyone is having a close look at how they can increase footfall and there has been a huge attempt to incentivise customers to come into the shop.”
Laing warned jewellery retailers to be wary of figures that include London sales, which often push up averages because of the city’s strong tourist trade that is cashing in on the weak exchange rate. He said that it is still wise to err on the side of caution.
He said: “There is a huge downturn in the industry and I’ve got massive issues with the figures produced. It’s not enough to compare with last year, we need to compare with 2007 – you need to be up 25% on last year.
“Big one-off sales can camoflague the trend and if those one-off sales dry up – and there’s every indication that they will – you need to focus on your core business. This is not just my opinion, I’ve taken financial advice for my own business.”