Why are UK prices so expensive!?

[superdez]

There are a couple of reasons why the price of imported goods are higher in the U.K than US/Europe/Japan partly down to VAT, import duty etc, partly down to high property prices which feeds into higher wage demands and high rental costs.

You may also argue that various employment/trade/health & safety regulations have the effect of adding increased costs.

However, the main reason why prices are currently high in the U.K is that the £ has been devalued against dollar, yen and euro by around 30 to 40 percent since the credit crisis of 2008. Hence making imported goods more expensive than they were in 2007.

Devaluation, which incidentally was caused by quantitative easing and has been exasperated by 0.5% interest rates is great for the erosion of national debt through inflation, but not so great, if like the U.K is, a net importer of goods priced in dollars, yen etc.

An example of the hugely damaging policy that the bank of england and the government has embarked upon with regard to inflation and devaluation is fuel prices. During the crisis of 2008 oil rose to $150 a barrel yet petrol never rose above £1.20l. Today oil is trading at around $84 yet petrol is close to £1.40l


You also need to factor in the huge amount of quantitative easing that has gone on in america, which has caused a general spike in commodity prices globally.

Bit of a rant, but thats the main reasons.

[racingdwarf]

I agree, and also wish I could have spelt half of those words....well impressed

[SlowOne]

Originally Posted by Si Coe

Too true that its not just RC's.

Once (when we had a car industry) it was possible to buy a Rover in Holland and import it back to the UK for less than it cost to buy the same car in Birmingham just yards from the factory - except of course that Rover would never supply the Dutch dealers with RHD cars......

I have to admit I still can't fathom how other countries manage to run their state with lower taxes, lower prices and no obvious drop in the level of service. OK, some places don't quite have a National Health Service, but the cost of health insurance is less than the reduction in taxes over the UK, so they are still quids in.

The last bit's not correct, Si, and part of the continuing myth about our NHS. Healthcare costs for each of us are lowest in this country of almost any other country in the West. See this comparison:

http://en.wikipedia.org/wiki/Health_care_system

In the US, health care costs more than twice as much per person as it does here. Only if you are one of the 38% of people whose employer pays your medical cover does it come cheaper than in the UK, everyone else pays through insurance, etc.

Yes we pay for that through NI contributions, but if you have to buy health insurance you pay much more, sort of an indirect tax. HTH

[F1END]

That's fair enough for Japanese and American products, but what I find ridiculous is that I could buy a Schumacher Cougar SV from Amain Hobbies in USA and get it shipped here for less than I would pay for it here.

And I only live 10 mins from the Schumacher factory!

[Si Coe]

Originally Posted by SlowOne

The last bit's not correct, Si, and part of the continuing myth about our NHS. Healthcare costs for each of us are lowest in this country of almost any other country in the West. See this comparison:

http://en.wikipedia.org/wiki/Health_care_system

In the US, health care costs more than twice as much per person as it does here. Only if you are one of the 38% of people whose employer pays your medical cover does it come cheaper than in the UK, everyone else pays through insurance, etc.

Yes we pay for that through NI contributions, but if you have to buy health insurance you pay much more, sort of an indirect tax. HTH

True - but even without NI their tax bill is also less. I wasn't popping at the NHS specifically, its just that it is the one major thing our taxes pay for the we wouldn't get in other countries.
What I am saying is that, if I lived in the US on the same income I have here, I'd have to pay health insurance yes, but the tax bill and cost of living is so much less that even after that I'd have more disposable income.

Whenever people complain about how much more we are taxed than other nations - someone always says 'Ah but we get free healthcare'. This is true, but the cost of the NHS is actually much less than the difference between taxation's.

In other words that extra money isn't all going into healthcare, so where does it go??????

[Skye]

Originally Posted by F1END

That's fair enough for Japanese and American products, but what I find ridiculous is that I could buy a Schumacher Cougar SV from Amain Hobbies in USA and get it shipped here for less than I would pay for it here.

And I only live 10 mins from the Schumacher factory!

Just checked this out. The SV Pro CF from AMain is $330 which is £199.54.

A quick google search shows that it is around the £250 mark from UK retailers.

So it may not actually be much cheaper (if at all) from the USA by the time you add shipping and customs.

But.... I do agree with you to a point, when Schumachers factory is on Moulton Park industrial estate which I could physically drive to and pick up the goods from the door in about 20 minutes from my home, then I would expect to be paying less than people in the USA who have had to have to goods shipped half way around the world....

[bodgit]

Originally Posted by F1END

That's fair enough for Japanese and American products, but what I find ridiculous is that I could buy a Schumacher Cougar SV from Amain Hobbies in USA and get it shipped here for less than I would pay for it here.

And I only live 10 mins from the Schumacher factory!

Why dont you drive to the factory or phone them and ask for the manager to explain why this is so. Why cant they have an over the counter price there at the production site.

[Si Coe]

Originally Posted by Skye

Just checked this out. The SV Pro CF from AMain is $330 which is £199.54.

A quick google search shows that it is around the £250 mark from UK retailers.

So it may not actually be much cheaper (if at all) from the USA by the time you add shipping and customs.

But.... I do agree with you to a point, when Schumachers factory is on Moulton Park industrial estate which I could physically drive to and pick up the goods from the door in about 20 minutes from my home, then I would expect to be paying less than people in the USA who have had to have to goods shipped half way around the world....

Ahh - But you also need to compare it against the prices for a B4.1 and a TLR22. Those are also much cheaper in the US. The Cougar is simply priced close to its competition.
This does mean that in the UK market Schumacher (or the model shop, or the tax man) make more per car than in the US.

[Skye]

Originally Posted by Si Coe

This does mean that in the UK market Schumacher (or the model shop, or the tax man) make more per car than in the US.

Judging on the comments from the respected views of people such as Marc and Darren etc, then I would say this is either option 1 or 3 as the shops dont seem to make much from the sale. This is the worst case scenario in my opinion. I would rather the shop on the street have the bigger margin, whereas in reality it seems like either the manufacturer or tax man fill their boots whilst the shops still struggle by on minimal margins...

[Cosworth]

we Just love being brutally raped with several fingers

[longy8ight]

The question "why do we pay way well over the top for everything in this shit hole of a country"

Well my opinion is this: Like myself millions of people get up and go to work everyday to earn a living,in doing so we get rapped every payday with tax.We have a government that looks after this money and decides what to spend it on best.BUT THEY DONT SPEND IT ON WHATS BEST. for years mp's have been feathering their own nests,giving our tax money to every tom,dick and harry in some far off place,wasting it on stupid shit e.g the millenium dome 800m odd! paying people that cant be arsed to get off their arses and go to fucking work! making it too easy for these little sket girls to have kids and get a house all paid for and money every week for nothing! having all these foriegners here claiming our tax money in benifits and then sending it to their homeland to help their poor families wtf?

these are just a few things i can think off,some people my think im talking shit,but its the truth,we as a nation all moan about stuff,but wont do FA about it.

I'm affraid if your a hard working brit then we will just have to sit back and keep getting rapped by the government.

[davidmog99]

Originally Posted by superdez

There are a couple of reasons why the price of imported goods are higher in the U.K than US/Europe/Japan partly down to VAT, import duty etc, partly down to high property prices which feeds into higher wage demands and high rental costs.

You may also argue that various employment/trade/health & safety regulations have the effect of adding increased costs.

However, the main reason why prices are currently high in the U.K is that the £ has been devalued against dollar, yen and euro by around 30 to 40 percent since the credit crisis of 2008. Hence making imported goods more expensive than they were in 2007.

Devaluation, which incidentally was caused by quantitative easing and has been exasperated by 0.5% interest rates is great for the erosion of national debt through inflation, but not so great, if like the U.K is, a net importer of goods priced in dollars, yen etc.

An example of the hugely damaging policy that the bank of england and the government has embarked upon with regard to inflation and devaluation is fuel prices. During the crisis of 2008 oil rose to $150 a barrel yet petrol never rose above £1.20l. Today oil is trading at around $84 yet petrol is close to £1.40l


You also need to factor in the huge amount of quantitative easing that has gone on in america, which has caused a general spike in commodity prices globally.

Bit of a rant, but thats the main reasons.

Absolutely nothing to do with devaluing of the pound to the dollar.
The pound anyone spends has almost the same value to the dollar, unless you work in currency exchange.
if this was the main reason for the price difference, it would not be worth importing goods from america indepenently, buying fom a U.S. shop, they would be too expensive. Its apparent the products are considerably cheaper in the states even INCLUDING the fact the pound is weak.
The post was about the reasons for the price difference, and the pound being weak is not the reason at all. Importers/Distributors pay import taxes, yes, but american import duties are usually higher, check with hmrc if you like.
And a GLOBAL commodity spike would affect prices GLOBALLY not explain one countries high prices compared to another.
There are many reasons why the prices are higher in the uk, transport costs, smaller market, higher sales taxes, etc, but the real reason in this case is the high prices charged to the model shops by the distributors.
Its ridiculous to blame the exchange rate when the exchange rate is the same for a private buyer. The model shops work hard and the distributors take the money, and thats how most business works in this country, whether you like it, or want to admit it, its true.

[Si Coe]

Also - items have been the same price in pounds or dollars for the last 25 years (that I know of at least) during which time the relative value of both currencies have gone up and down. Prices at the till don't change the same way - currency fluctuations mostly eat into importer margins.

That fact is that prices are set by the market. If we weren't prepared to pay those prices, then there would be no point trying to sell at them. That is way UK manufactured items are cheaper elsewhere in the world - nobody else would buy them for what they cost here.

If we all didn't buy, prices would come in line PDQ. Real car prices improved a lot once European law forced manufacturers to allow you to buy a UK spec model in Stuttgart. It was realised that it was no longer possible to charge a premium in the UK and to some extent it was reduced.

[davidmog99]

A couple of model shop staff i know well say the uk distributors are charging them more for a part with an official account than hong kong based sellers can sell one part for INCLUDING postage, from the other side of the planet.
Not a good way to support retailers.
Its a myth that vast stocks are held of these injection moulded parts. Its development and mould casting that costs the money, parts cost pence to produce after this, even on a small run.
Im not complaining about the price i have to pay, i just think the shop should be able to make a reasonable profit and survive!

[lochness42]

I have to laugh, you're angry that stuff in UK is expensive. What should I say? We've got same or even more expensive stuff and lower salaries than you do. Now that's annoying.

[Nick Goodall]

Like Marc (MK) says Shops in the US buy direct, they can do that because they probably order 200+ of each kit whereas a smallish shop in the UK is probably only ordering 5-10 at a time

[mattr]

Originally Posted by davidmog99

A couple of model shop staff i know well say the uk distributors are charging them more for a part with an official account than hong kong based sellers can sell one part for INCLUDING postage, from the other side of the planet.

I get pretty much the same price difference from here to the UK. Which is what, 600 miles as the crow flies?

[andys]

Originally Posted by longy8ight

The question "why do we pay way well over the top for everything in this shit hole of a country"

Well my opinion is this: Like myself millions of people get up and go to work everyday to earn a living,in doing so we get rapped every payday with tax.We have a government that looks after this money and decides what to spend it on best.BUT THEY DONT SPEND IT ON WHATS BEST. for years mp's have been feathering their own nests,giving our tax money to every tom,dick and harry in some far off place,wasting it on stupid shit e.g the millenium dome 800m odd! paying people that cant be arsed to get off their arses and go to fucking work! making it too easy for these little sket girls to have kids and get a house all paid for and money every week for nothing! having all these foriegners here claiming our tax money in benifits and then sending it to their homeland to help their poor families wtf?

these are just a few things i can think off,some people my think im talking shit,but its the truth,we as a nation all moan about stuff,but wont do FA about it.

I'm affraid if your a hard working brit then we will just have to sit back and keep getting rapped by the government.

Love it - you sound just like me !

Personally I think we are getting royally shafted at various points along the line - as has been suggested I would assume it's the distributers that are making a decent cut, not the shops.
Many years ago (when the pound was stronger) I bought a couple of kits and speedo's from Hong Kong & America and paid almost half what I would in the UK - crazy times.

These days I only support my local model shop. They are helpful, well stocked and normally have the stuff in I want or need. I also buy bits trackside as I want to support the local shop who bothers to bring a van load of stuff to race meetings.

I choose to spend my hard earned with people I think deserve my business, and I think that's very important. I want to support the people who help support my hobby in my local area.

[davidmog99]

To blame the low value of the pound to the dollar when discussing how much cheaper it is to import goods from america, using pounds exchanged for dollars is ridiculous.
Its like saying chinese made bread is expensive in Britain, and its cheaper if i buy chinese made bread from america. TOTAL BS.
In fact if you only have to buy a couple of hundred units to deal with the manufacturers directly, ill look into it.

[machinedred]

we pay oto because our government hit our tax payers so hard ie the shopkeeper because the government need the money to pay off debts