VAT changes

I’d like to think at Alpkit we have a fair understanding of the recent financial problems such as negative equity, outstanding student loads, unsold houses, rising fuel prices; these are all things that one or all of us face in today’s economic climate. Equally we all like to go nice places and do nice things; ultimately we have to face up to the difficult balancing act that air travel and car use pose to those of us pursuing activities close to their heart and soul.

It’s not surprising then that the last few months have been a real wake up call to the fragility of what we do. We try and run our business as efficiently as possible, we don’t print wasteful catalogues, a few of us commute to work by bike but generally we’re just not that wasteful. This has meant that there isn’t a lot that we can trim. If we had a corporate jet sitting on a launch pad out the front then of course it would get the chop, but at the moment I’m struggling to see what else we could do apart from getting rid the doughnuts, however I’m not going to be the one that tells Ken after he’s ridden in that there isn’t anything to go with his coffee.

From the very beginning Alpkit has been focused on delivering great products at fantastic prices. We sometime use the tag line, ‘Not Cheap - Just Direct’ as this goes some way to explain how we operate. Although this does give us distinct cost advantages it also means that changes to the economy are filtered through to the shop floor even quicker. For example you may have seen the price of our titanium products bounce up and down over the last 18 months. The cost of the raw material rises and falls, the value of the pound against the dollar drops and shipping costs are closely indexed to fuel prices. At Alpkit we do not fix the price of our products for a year, as it happens we got a good deal on our last titanium order and we were able to pass on these savings which has been reflected in our recent price decreases, however sometimes prices need to increase.

Over the last 6 months we have seen our costs increase by 30% through exchange rate rises alone. We have held these increases by as much as we can but this is not something we can continue to absorb if we want to remain a sustainable business. We are committed to offering great service, great prices and great products in a plain speaking friendly manner, so when Alistair Darling announced the 2.5% decrease in VAT it did put us in a bit of a pickle. When we started Alpkit we didn’t want to have 99p here, 95p there, we wanted real solid prices that could stand up in their own pants. Taking 2.13% off all our prices would leave our prices looking decidedly floppy.

Many of our products will need to increase in price in the next few weeks to absorb the exchange rate differences. We don’t want to add 10-15%, take off 2.13%, then in 11 months time do all the same again when it goes back up to 17.5%.. or maybe 18.5%. So rather than a definitive change to our retail prices on the 1st December we have decided to use the VAT change to lessen some of the price increases.

I’m sure that some will see this a cynical ploy to boost our profits, and I can only answer this by saying that you will just have to trust us. In reality I don’t think there will be many people queueing at our shop Monday morning just to save £1.38 on a SkyeHigh400 sleeping bag, but I hope some of our regulars will be around to save £20 on our SH400 deal. So although you won’t suddenly see an across the board 2.13% decrease in our prices I’d like to think our products will continue to be some of the best value products on the market, backed up with great service, if not tell us.

Have a good Christmas,

Nick and all the team.

By Nick