CSR analysis - Retail

VAT is key cause for concern

The spending review may have less impact on garden centre retailing than the VAT rise planned for January 2011, according to centre owners.

Sidmouth Garden Centre owner Ian Barlow said: "Most of my customers are retired and although no-one is exempt from the pain I think they have got off lightly. People who work for the council may lose jobs, but in this area we have got away fairly lightly. I can't see it making a big difference. It's not a surprise.

"We're more worried about inflation going up, with VAT set to rise in January to 20 per cent. That is cutting into margins and is more likely to stop people coming in. We have to concentrate on what we do well - customer service. Customers may be making trips out twice a week instead of three and we have to make sure that we are one of the places to which they come."

Wholesaler and importer Solus Garden & Leisure, which supplies 2,000 garden centres, said more than 250 buyers had visited its Droitwich showroom in the last fortnight and most were "positive and optimistic" about 2011. Product development manager Dean Winters said: "We'd rather have a recession year when the sun shines to a boom year when it rains."

HTA director of business development Tim Briercliffe said: "These are difficult economic times and serious actions need to be taken. Clearly the detail will need to be examined as it emerges to understand the full impacts of the cuts in each department, particularly in Defra, which has suffered heavy budget losses."

He added: "In general, we support the coalition's intention to eliminate duplication of effort within Government and to remove, reduce or provide for better regulation that enables the private sector to lead the economic recovery".

Meanwhile, HTA retail committee chairman Philip Evason said: "The impact of the review will be marginal in our sector. I'm quite positive. When there are tougher times there is a return to simpler things in life and gardening is maybe going to grow because of that."

Frosts managing director Paul Wright added: "It won't affect us any more than the climate in which we have been trading since the fall of the banks."

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