Vat increase begins to bite
■ Jim Lally of Lally's Electricals, one of the local businesses that feels they 'have to take the hit' and absorb the VAT increase.
THE TWO per cent VAT increase of will be absorbed by some retailers, including Lally's Electricals who have stores in Dundalk and Drogheda. 'Absorbing the increase was the only choice for us,' said Jim Lally. 'We have to take the hit, as we can't advertise goods at a certain price and then push them up. The market is too competitive at the moment and we are competing with the north so it is simply something we have to absorb.' He added that Lally's have continued to be as competitive if not cheaper than many of the multinationals north of the border. 'We have people from the north, South Armagh and parts of Newry, coming to shop with us as they realise it is cheaper and also because safety features are better on a lot of the appliances in the south.' Despite tough trading conditions for many retailers, worsened by the VAT increase, Jim said Lally's had a busy December and there were positive indications for January. 'We actually started our January sale three days before Christmas as we wanted to ensure holidays for staff this year.' He said that when they reopened on December 28, it turned out to be the busiest trading day of 2011. ' The three busiest months of the year for us are November, December and January, so we are fortunate that it has continued over the last few months.' ' But customer trends have changed, people are buying at the lower end of the market, as there is still so much uncertainty. We have a huge range of deals on absolutely everything in store, so shoppers know they are getting great value.' He said that although absorbing the 2 per cent VAT increase would place additional pressures on the business, they were anxious to retain their competitive edge. 'Our margins are incredibly tight at the moment, so it is difficult, but we have no choice only to continue providing continued value for our customers.'
