Sales of big ticket items began to show a month-on-month improvement in February, following the fall in January after the VAT rise, according to data from EBay.
However, shoppers are still cautious about their spending since the VAT hike.
EBay sales data showed that sales of fridges and freezers were up 6% in February, compared with January’s figures. Fridges and freezers experienced a sales surge pre-VAT hike, with sales soaring by 37% in December. Sales of fridges usually rise by 9% in December.
However, sales plunged by 12% in January after the VAT rise.
Ebay vice president of European marketplaces Clare Gilmartin said: “While the recent VAT rise only had a short-term negative impact on consumer spending, we know consumers are still feeling the pain as they are budgeting to ensure they can afford basic necessities. Although sales figures are rebounding, consumers are becoming more careful with their money.”
The VAT rise is still influencing shopping behaviour. According to an eBay survey of 2,000 shoppers, 41% said they have intentionally reduced their spending since the rise. Over half those surveyed said they now had less disposable income available and 68% thought Wednesday’s budget would further hamper consumer spending.
Gilmartin said: “The next couple of weeks will be crunch time for retailers who will be keeping a close eye on consumers’ response to the Budget, and both SMEs and consumers alike will be hoping there are no surprises that could harm the fragile state of consumer spending.”