Sir: The Chancellor announced this week that pasties straight from the oven, or cooling naturally, will remain exempt from VAT, but consumers asking staff to reheat a pasty will incur the tax.
Over the past three years the average annual increase in consumer spend for the QS bakery category was 0.3%, while consumers taking advantage of deals/promotions jumped from 11% in 2009 to over 15% in 2012.
When it comes deciding how much to spend, consumers have an internal calculator, with their own average price point. It weighs ‘value menu’ vs ‘menu value’, and means the increases consumers are willing to tolerate remain fairly predictable. They’ll use strategies to regulate the amount they spend: trading down, trading out, weighing value vs premium, and so on.
With average spend of £2.51 in QS bakery and less than a 1% increase in visits for the year to March 2012, surely a tax by temperature risks tripping the consumer’s internal calculator?
Guy Fielding, Director - Foodservice Europe, The NPD Group