The VAT cut introduced this week is expected to delay spending until this weekend, as shoppers wait for lower prices.
Experian FootFall senior quantitative analyst Anita Sharma Manan said: “[Last] weekend was key as November’s pay cheques had just been paid. VAT could well be having an impact as shoppers may be delaying spending.”
Experian figures show shoppers did not come out in force on Monday, the day of the cut, meaning there are likely to be footfall increases this weekend forecast to be just 1 to 2 per cent down on last year.
Some retailers have reported an uplift following the VAT cut. John Lewis implemented the cut last Friday and said the week got “dramatically better from the Friday”. The Entertainer, which cut all VAT from most products this week, experienced a 580 per cent uplift in online sales on Monday.
As a result of the VAT reduction, Northern Ireland’s rate is now 43 per cent lower than that of the Republic’s. That, combined with the weakness of sterling, is likely to prompt a surge in cross-border shopping from the Republic.