Gift prices up, “Christmas sale” questioned

16/12/2011 14:21

A tracking of Christmas sale prices on some gift stores by the Consumer Council has revealed that theso-called “Christmas sale” on their glossy catalogues is a gimmick and does not amount to real reductions inprices.

In December 2010, the Council collected and kept the Christmas sale Catalogues of these stores and werecompared with the Christmas catalogue that came out for December 2011. The Council compared the priceof watches and perfumes.

And the Council is shocked to find that prices have increased to as high as 86%. Out of a total of 41 itemssurveyed in two major gift stores, 28 items have increased in price from the Christmas prices advertised inDecember 2010 Christmas catalogue. Only 3 items dropped in price, while no change was recorded for 10items. The Council compared items according to matched model numbers, serial numbers, sizes, etc.

Some examples: Sarah J Parker Lovely perfume (100ml) was sold for $64 in 2010 and now it’s available for$119, an increase of $55. Kenzo Jungle Homme perfume (75ml) increased by 51% - the 2010 Christmas pricewas $99, but this year its $149. Kenzo Flower Coffret perfume (100ml) increased by a massive 72%!Generally, the price difference of watches has increased by as little as $4 to as high as $750. Aquaracerwatch was on Christmas special for $3,240 in 2010 and this year the same watch is on Christmas special for$3,990, an increase by $750 ie 23% price increase. Details of 41 items are attached.

The table below summarizes some of the findings.

Number of items

41

Average %

Number of items with price increases

28

68.3%

Number items with price decreases

3

7.3 %

Number of items with no price change

10

24.4%

 Prices have gone up despite decrease in fiscal duty from 15% to 0 for perfumes, watches, and jewelry in the2011 Budget announced in November last year. The Council has also analyzed the change in Value AddedTax from 12.5% to 15% beginning January this year. While VAT has increased to 15%, importers of theseitems have enjoyed a drop in fiscal duty to 0%. When applying the new VAT rate to 2010 prices, the pricesadvertised in December 2011 are still way high than expected. For example one item advertised for $99during Christmas 2010 is now priced at $149. When applying the new 15% VAT rate (on 2010 VEP) itcomes to $101.20. The price on offer is $40 more than what is expected. The exchange rate was alsoconsidered.

The results of the survey again strengthen the Council’s view that retailers are not passing downGovernment’s tariff reductions to consumers. We believe consumers are being falsely led to believe thatthere is a real sale on when in fact if one compares prices from last year, they have actually increased.Because it is the festive season with Christmas around the corner consumers can be easily persuaded byglossy Christmas catalogues and so-called “Christmas specials” or “Christmas sale prices”.

Price surveillance is one area that the Council will be strengthening. This involves tracking the prices ofgoods and services throughout the year and ascertaining whether the retailer who claims to have a “sale” isactually dropping prices in the true sense of the term “sale”.