Tesco hopes its VAT-free promotion will boost clothing sales

Tesco hopes its VAT-free promotion will boost clothing sales

Tesco is cutting the prices of all adult clothing lines by 20% in a bid to kick-start sales after a lacklustre performance over the key festive trading period.

The reductions effectively mean the UK’s largest supermarket is removing value-added tax, which rose from 17.5% to 20% on 4 January.
 
The price cuts started yesterday (26 January) and will run until 1 February.

“The deals will come at a great time for customers looking to refresh their wardrobes with spring 2011 fashions – without paying the spring 2011 VAT rate,” explains Kari Daniels, Tesco's non-food marketing director.

As part of the promotion, men's shirts have been reduced from GBP8 to GBP6.40 (US$10.2), and a hooded jersey jacket is down to GBP31.20 from GBP39. A black floral print jersey dress is reduced to GBP12.80 from GBP16, and women's trousers are down from GBP5 to GBP4.

Earlier this month Tesco blamed bad weather in the run-up to Christmas for a 1.5% drop slump in non-food sales over the holiday period.

It is also facing stiff competition from rival supermarket retailer Asda, which has promised to be 10% cheaper than its competitors or give customers the difference.