Retailers ‘incensed’ by attack

BUSINESSES have hit back after the Treasury Minister dismissed the claim that it was always more expensive to do business in Jersey as an ‘urban myth’.

David Warr, president of the Chamber of Commerce
David Warr, president of the Chamber of Commerce

BUSINESSES have hit back after the Treasury Minister dismissed the claim that it was always more expensive to do business in Jersey as an ‘urban myth’.

David Warr, president of the Chamber of Commerce, said that Senator Philip Ozouf’s comments were an attack on hard working and honest retailers and wholesalers.

‘To make the assertion that he doesn’t believe doing business in Jersey is generally more expensive than in the UK is an attack on the whole business community which he is clearly accusing of making excessive profits,’ Mr Warr said.

In a report published on the front page of Saturday’s JEP, Senator Ozouf called on those importing and selling tobacco products, alcohol and petrol to explain why their margins after duty and taxes were removed appeared to be so high.

Comments for: "Retailers ‘incensed’ by attack"

Alan

Instead of moaning about Senator Ozouf's comments maybe they could explain all these mark ups on cigarette, drink and fuel instead?

Scrutineer

I think it comes down largely to rents and wages, which are indirectly related anyway. Shipping is not a major issue. Wages in retail were driven up by public sector wages. Public sector wages rose too much in the good years as a result of fallacious job comparability with finance, but unlike finance have not seen a mixture of job losses and downward wage pressure. Sort out public sector wages and a lot of problems will be solved after a while.

gino rioli

table the evidence, not individual judgements

plagne

Glad Ozouf has pointed out what we all believe.

It is normal for us to get the maximum when we are off island.

I wonder if Harley st is cheaper than our local dentists for example?

me

I am getting really sick of seeing and hearing David Warr

Michael

Nothing to chose between the two of them Ozouf or Warr and Co. Warr for the members of his trade Union over- charging for years and Ozouf for his beloved GST and particularly for GST on food and childrens clothes they are both of no help to the ordinary decent hardworking people who make up the majority Jersey people.

Sparky Douglas

Mark ups are taxation. Return the question to the Senator.

D De Jersey

DW proves the standard business model in Jersey is not to compete by offering customers good value and great service, but whine to the press when profits are under threat.

Dusty

How right is the senator,you just have to look at cigarettes,milk,fuel,drinks and many other products that are well overpriced so who is making all the profits?

jeffto

Am I missing something here? The Treasury Minister..."doesn't believe that doing business in Jersey is generally more expensive than in the UK" seems to be supporting the local retailers not against them.

Nathan

I wish people would stop using cigarette & drink as an example of price fixing.... Human beings don't need these items in their life to survive...... If your going to complain about stuff then make sure you complain about things you need to get through every day life..... Food, water, clothing etc........ As a mild smoker & drinker myself if i can't afford to do this luxury i won't do it.........

Brenda

Sometimes the truth hurts!

Lost count of the number of times that I have turned to the internet as I have felt that I would have been ripped off buying local.

Though, cheaper internet shopping does not come without a consequence, and possible loss of local jobs.

Perhaps the directors of local businesses should stop lining their pockets so much, and stay in business.

The furniture business seems to also charge a massive market when compared to the UK.

egalitarian

When buying on the internet, you don't get to physically view and touch the items or try them on if it's clothes and shoes. (Don't forget it costs to return the goods if your internet purchase turns out to be unsuitable). You also don't get advice about your purchase unless you have made use of the local shopkeeper's time. Time which costs him money but not you, little different to stealing from him really.

Internet warehouses don't have expensive premises with displays and pay the people who do the dispatching the lowest wages possible, probably employing them by the hour without holiday or sick pay.

When all the local shops close, where will you do your research then? Don't say it won't matter, people are already complaining that they have little choice locally.

Parktown Prawn

egalitarian

It also costs to return goods to a local store.....parking and petrol is not cheap in Jersey you know! Besides a lot of companies offer free postage for returning their goods.

Why would you need to touch an item to help you make your decision on whether or not to buy?

A lot of websites show pictures from multiple angles so you won't miss any detail on the item.

Clothes and shoes, I understand, are better to purchase in person because sizes can vary....

You do get advice on websites actually. In fact, I find the Customer Reviews very helpful in making my purchasing decision. At least these are independent from the retailer who has a beneficial interest to "sell" you their goods.

Have you never considered how the post and parcel industry has benefitted greatly from the internet boom too?

Where one industry fails another will succeed....in my opinion....yin-yang and all that ;-)

Please come up with some real and valid arguments before trying to put your point across to everyone.

puffin

I too find the customer reviews on the internet very helpful as they are usually written in English. Unfortunately when visiting shops in Jersey half the time the assistants don't speak very good English, or are too busy chatting in their native language to other members of staff/friends/family that seem to hang out in the shops with them.

I would prefer to shop locally but there is nothing local about being the only person in a shop that speaks my language, and then paying double + GST + VAT is taking the piss!

The Nock

Ok David Warr, I challenge you and yours to prove what you say. I do my best to shop local but most of the time it is cheaper (and in many cases MUCH cheaper) to shop Amazon or the likes. I am incensed every time I walk into a shop in town and the prices are way over the top!!!!

Simple Sid

Jersey is now more expensive than the UK what is Warr talking about?

Jambo

Yes, i can understand this...the Spar certainly don't over charge. I just don't go there anymore.

Whereas the Royal Yacht...anyone fancy paying £150 to stand in a room...a magician might be along shortly...or not in my case.

HOWLER

i have little sympathy for a lot of jersey businesses after years of there over priced goods thank god the internet arrived, but the main problem we have now is the greedy land landlord be it residential or commercial these people are strangling this island with the support of our government with rent rebates and subsidies lets take away these rebates and subsidies and let market forces do there work not that is going to happen when the place is being taxed to the hilt to pay these subsidies.just annoying that the £3 duty on a packet of cigarettes eventually finds its way in the landlords pocket hmmmmmmm who ever could these landlords be i wonder scandal scandal scandal

Wilson Riou

The reason that rents are high is entirely due to market forces. Small island limited space for further housing development, very strong economy and until recently more jobs available than people, means massive pressure on housing and so high property costs. Rents are directly proportional to capital values - it's called economics.

Geddit now?

HOWLER

'until recently' (and may be never to return) supports my argument why should our government subsidize rents unless it benefits them in some way- its called fraud

geddit now??????

Nick

My sister-in-law recently bought a bike for my niece's birthday...in a well-known bike shop in Jersey it cost £200, she bought it from Amazon for £65 !!!! And yes it is exactly the same bike.

She could buy 3 from Amazon for the price of one here, can anyone justify that price dfference??

James Wiley

Well there are many reasons, it could simply be that someone had a cheap supply either through insurance write-off or bankruptcy. Someone could have been selling that particular model at a loss. I dare say if you had looked harder then you could have found it even cheaper still

Nick

Brand new model so that seems unlikely.

Anon

David Warr lost all credibility the minute he put Georgee Osborne on the spot over LVCR. It is reported in comment number 20 by Dave in this newspaper: http://www.thisisjersey.com/news/2011/11/08/uk-to-pull-the-plug-on-fulfilment/

How Mr Warr, the owner of a small business, can purport to represent larger companies is beyond me.

Bright Side

The continued drivel posted on some of these articles never ceases to amaze me. People wade into a debate "up in arms" about something they have no clue about - and often can't even be bothered to write properly and pay attention to grammar!

Of course it is more expensive to do business in Jersey when compared to the UK. Anyone with half a brain can work this out!! For starters, there are economies of scale - there just isn't the demand in Jersey to enable (some) retailers to buy in the sort of bulk that UK vendors do. This is on top of the fact that they have to pay extra shipping, duty and other freight-related costs. When alcohol is in the mix, you also have to factor in Customs (which is not unique to Jersey, but continues to add the the cost). Then there is the cost of running retail premises. Rent is more expensive, the minimum wage is higher and utilities are pricier too. It all adds up!

I struggle to see how the cost of running a retail business in Jersey is the same as the UK. It is all relative at the end of the day. If you choose to live and work on an Island where less than 100,000 people live, you must expect to pay for the privilege!

The people who moan about the Island, are probably the people who are the quickest to save a few quid and buy online, without realizing that they are actually adding to the issue. I'm not naive enough to say avoid online full stop - blimey, we all do it for some things, especially those items you can't get in Jersey! But by continually driving business away from our retailers, we are putting even more strain on the Jersey economy and inevitably, prices will rise even further!!

Mark G

lol you come and comment and slate other people for not having a clue yet you too do not have a clue.

1. bulk purchases already occur on island but some retailers fail to pass on the savings

2. shipping costs the same as sending goods from the south to the north of the uk.

3.Jersey duty is less than the Uk

4. leases you are correct. leases are much more than the uk.

5.minimum wage. the full cost of employing in jersey at minimum wage (all inclusive) is actually 2p per hour cheaper than employing someone the uk minimun wage.

6.utilitie prices are comparable to uk prices,although gas is higher.

island life is expected to be dearer but hiw can you justify the higher margins been charged.....only one reason and thats greedy landlords.

now go and count all my spelling errors!!!

Wilson Riou

Go on Mark G if its as rosy as you make out why not put your money where your mouth is and set up a retail operation here selling at Amazon prices. You'll make a killing!!

Bright Side

All I am saying is that some of the people that pipe up here, really bring nothing to the argument! I'm all for two sides of a story, and I've no doubt there are some that take advantage for the convenience of only being down the road, but I don't believe you can tar all with the same brush. I'm also not in the business of counting spelling errors - and anyway you didn't do too bad ;-)

As a flip-side to what you wrote in response:

1. Yes bulk purchases do occur, but they haven't got a hope of competing with the big chains in the UK (John Lewis etc) who buy on a much larger scale and also have online platforms.

2. The fact that shipping costs the same to Jersey as from N to S of the UK is irrelevant. The majority of goods come via the UK from their International origin, and so the vendor will pay for shipping to the Mainland, and then to Jersey as an extra.

3. Duty may be less, to be honest I'm not entirely sure, I thought it was more.

4. Thanks.

5. Again, I'm not sure of the minimum wage differences, but to extend my first point, you also pay more for services as the cost of labour is typically higher on the Island (so repair costs go up, servicing costs go up, legal representation is more expensive, Accountants cost more etc etc).

6. Water and Gas are certainly more expensive than the UK, not sure about Electricity.

It's an interesting debate, but I still believe that the Minister is wrong, and it is genuinely more expensive to do business on the Island. Whether the prices paid reflect this accurately, will be interesting to see...

Mark G

I do agree with you that to operate a business in Jersey is more expensive then the UK but the fact is that the highest cost in the list we discussed to a retailer is the leases. Until landlords join the game the retailers have no chance at all. I was responding to your comment about people not having a clue, which again i agree with as we have a Minister who is clueless.

In answer to Wilson Riou above, I have seen numerous business's start up in Jersey and become successful and profitable even in the hard times but these business's move with the times and change thier business to suit the market, negociate hard on costs and move if they have to. Lets not forget Woolworths (Jersey) was the most profitable Woolworths in the UK and were competing with Amazon and the likes back then, it only closed to the failure of the UK branch. All the pound shops in town are successful because there was a gap in the market. diversify! Amazon and the likes will be here for a long time so retailers must adapt.

In response to me putting my money where my mouth is....well no need.

Bright Side

You're certainly right about the clueless Minister. Unfortunately he's one of many who are hideously out of touch with reality and the real world!

I have to say I'm a bit skeptical about landlords being the main reason, but I agree it would be really interesting to see just how much money they cream off the top once mortgages and costs etc are paid.

Also, that's amazing about Woolworths - I never knew the Jersey branch was so profitable. Woolworths' problem in the UK was that it didn't have a specific purpose or target market, it was a "jack of all trades, master of none" situation, but this obviously suited the Jersey market very well.

You're completely right though, retailers have to adapt and change to their consumers' needs which is why the pound shops do so well.

Mario

Economies of scale? Don't try that old chestnut on me. I remember in the 1990's when I visited Sark regularily that you could get a litre of milk for less than you could in Jersey. Explain how they could produce milk for 500 people for less than Jersey could for 80k plus.

I also remember quizzing some retailers in the 80's and 90's about higher prices and was told by more than one that it was because they had a captive audience. Now the boot is well and truely on the other foot.

I for one will not forget what happened in the past and now use every opportunity possible to cut out the expensive middleman and go direct to source as it saves time, effort and money. Why pay VAT, GST and shipping costs when you don't have to? Times are hard and every penny counts now. Gone are the times of plenty when it was easy come, easy go.

At the end of the day local retailers will have to become competitive or go to the wall such is the way of capitalism. Dog eat dog and all that. The island economy is under pressure due to high prices and reliance on one sector which is stalling. A one legged economy is asking for trouble.

Wilson Riou

Points all well made. Judging by many of the comments on the subject of retail pricing in Jersey it's clear that simple economics should be a mandatory subject at GCSE level.

Parktown Prawn

Bright Side

The prices in Jersey can go as high as they like....if nobody is paying those prices and shopping online then so what!

You say Jersey has a limited consumer base.....but there are 6 billion potential consumers in the world. The internet has brought all of these people a lot closer so what is stopping some of these moaning local retailers from using their brains and setting up their own websites???

There are thousands of small businesses that already do this so you cannot make any excuse for them.

The cost of running a business in Jersey was once relative to UK in my opinion. For starters there were less unemployed here, therefore, more people with money to spend. People were generally on higher wages (although cost of living was higher too) and could usually afford to pay a bit more.....until the internet gave us all a choice to pay reasonable prices instead.

Why should we "expect" to pay for the privilege????

You think it is a "privilege" for people to have to buy things???

You fail to address the real causes which are draining money from our economy, so I will highlight a few:-

1) higher taxes = less money for the average consumer to spend = less input into the economy

2) low paid immigrant labour = money sent back to country of origin for better life when they return = money taken out of the economy completely!

3) government spending more than they take in = raising taxes to cover deficit = see point 1

Small online local business

One thing that kills online businesses in Jersey PP.

Jersey Post.

They cost me 50% of my profit per unit on a recent bulk send to the US.

It wasn't really worthwhile me doing it tbh.

I am hoping my brand and name gets known and perhaps if I can sell high volumes it might be worth it in the long run.

For now it really isn't.

So not so easy to set up an online business with 6 billion potential customers.

James Wiley

I would like to issue my own price challenge to the treasury minister, how come it costs more than double per head to operate the government of Jersey when we don't even have the big expenditures of Defence, Foreign Affairs, Interest on debt etc. to pay for.

Wilson Riou

Have you got figures to support this statement? I recall that one of the big four accountants analysed the costs per capita of government and Jersey came out favourably in comparison to other places - surprisingly perhaps..

HA

No, he doesn't, because he made it up!

Love & Hugs.

XXX

James Wiley

Why yes I do actually. I recall that report as reported in the JEP which said we had 'Rolls Royce' public services, now correct me if I am wrong but Rolls Royce is not a Tata is it? Tata however will get you where you want to go just as well and a hell of a lot cheaper.

100,000 people at 700 million per year is £7,000 per head, but this is just Treasury spending, this does not include all the stealth taxation which is charged by departments other than treasury (such as planning fees, license applications, permits, school fees, etc. etc.). These are not insignificant amounts, the JCRA for example gets £250,000 just from three telephone operators so it quickly adds up. Then there is the parishes.

Social Security also spends money out of the fund which is not included in the reported figures but is massive.

True government spending is never reported so I cannot point to it easily as you have to look through a number of reports.

Perhaps the JEP could assist here?

The UK has approximately 65.5 million people and total spending in 2013 for all government is set to be 676.5 billion in 2013 (that's all government spending).

Of that 46.3 billion is on Defence, 14.6 billion is given directly to the EU, interest on debts was another 44 billion and foreign office 2.5 billion.

So we are down to 575 billion or £8,500 per head.

Now strip out the stealth taxation, quangos and local and regional government from that figure and you are talking £100 billion in local government taxes alone, the total spend for all of this is £275 billion making the equivalent figure in the UK £300 billion or £4,500 per head.

The States of Jersey is a rip off.

Parktown Prawn

Well done James

Wilson....what places did Jersey come out favourably against? Qatar? Brunei?

soul doctor

Warr and Ozouf... Jersey's answer to Darth Vader and the Emperor.

Start with the highest price possible and add 5% GST. Not sure where the VAT free bit fits in. Many mainland online companies knock it off automatically. Local businesses don't?!!

puddle

Maybe if businesses were made to make their accounts public we could see if their net profit is excessive.Would love to know the profit margins of Sandpiper,Liberation Group,etc.

Splash

Private companies do not and should not have to publish their accounts, no more than you have to tell your neighbour how much you are earning.

Define "excessive" please?

Competitors of our private companies would also like to see what the profit margins are.

Silly idea. What we need is for private companies to make a lot of profit here, employ and pay a lot of people, pay rents, pay social security and taxes, buy supplies and services locally - if they do all those things, we should applaud and cheer, not scowl and jeer.

The truth

hi,

having lived in jersey for ten years now,and worked in retail for ten years,i feel the retail industry is misunderstood.we have to charge a little more simply because of overheads,rent ,shipping cost and staff,thats keeping the locals in employment.on a daily basis we have customers asking for discount which i would never do,would u go to a restaurant and ask for discount ,no,would u go in to the bank and ask for xtra £5,for free,no!so why do u expect cheaper in retail.if the residents of jersey really care about their island ...SHOP LOCAL,then we may be able to reduce the prices as we will be busier,so instead of shopping on the internet ,shop in jersey and save your local shops,otherwise workers will be penilised as unemployment will rise as will our tax to pay benefits.shop local please,thank you.

Mark G

While i see logic in your statement about shopping local i can also see the incorrectness in your statement. First, You have to remember that people do not have the money that was around a few years ago so they are not spending it now and if they do they shop on line making thier money spread further. Secondly when people were spending the money and using credit cards and trade was good the retailer did not bring the prices down they in fact put them up as you do with supply and demand.

Supply and demand, theres a saying. When trade is good you up the price, when trade is bad you lower the price...pity landlords do not understand the concept of this.

Shirley Knott

Jersey IS a lot more expensive and it is hard to justify.

I picked up a brochure for Christmas good from M&S. The prices looked high so I compared on line with M & S in the UK.

What a mark up! One example was an item that was £50 in the UK but £59.95 here. Everything was marked up well above GSY and what I would consider 'reasonable' cost for transport!

I know where I won't be food shopping at Christmas!

Ex Coopers customer

A while back in went into Mr.Warr's shop to buy some coffee beans. There were about 4 people ahead of me in the queue, the first one in the queue was in the process of ordering about 4 various coffees to go, the next in the queue did the same,the person in front of me walked out followed by me. Perhaps Mr Warr pays too much in rent so he cannot afford a second member of staff to serve customers who want something other than take away coffee.

gino risoli

Bright Side,

spot on, but we could hold our government to account by asking them to put detailed spending of our mney online so we may help them save our money, leading to less taxation.

Carole, St Sav

I hope he include Lawyers fees in this outburst?

The bottom line

Right. The retailers should get over it, start providing a service and stop taking the piss out of the St Helier customer.