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December 04, 2004

Well, Duh!

Britain is an expensive place to shop?

However, Mr Evans believes that British prices remain unnecessarily high, even taking account of the weak dollar. "For years we put up with the idea that we paid higher prices and we sort of assumed that it was for a good reason," he told TV programme Tonight With Trevor McDonald.

The article goes on about how internet price comparison engines are reducing prices by increasing competition. Well, yes, I’m sure they are. But they’ve missed the elephant in the living room. We have both a small crowded island and a constipated planning system (along with upwards only rent reviews which do not help). Retail space is therefore expensive. Grossly so, compared to other countries. Bath, one city I know, rents and council taxes are around 50 grand a year for a place the size of my living room (admittedly, I do have a large living room). You’ve got to sell 2 grand a week’s worth just to pay the damn rent! Of course shops will be expensive!
Price engines will increase the competition and reduce prices, yes, but the real difference is that internet sales don’t have to pay these rents. What really annoys me about this story is that we actually find that it is the Government, that cabal of Nu Labour pimplies, who are actually correct:

David Southwell, of the British Retail Consortium, said two Government studies had shown that "rip off" Britain was a myth. "The UK is a relatively high-cost place to do business. There will always be regional variation based on local taxation and costs."

Much as I hate to admit that the whey-faced morons who rule us could actually be correct on anything, in this case they are. There is no "Rip Off Britain". There’s just high land values and high taxation. That’s why shops are expensive.

December 4, 2004 in Economics | Permalink

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