Why is everything so much more expensive in the UK than in the States?

Question

I just don't believe that it is merely due to economy of scale. I think shops in the UK are ripping off people with unreasonably high profit margin. Or is the EU to blame?

Answer 1

Certainly the exchange rate is part of it. The $ is weak because of interest rates and the high price of oil.

Certainly competition is part of it. The US market is much bigger and more homogeneous than the European for most goods & services despite the 'single market' because of national cultural preferences, laws, and old habits. Roll out a product succcessfully as a small business in say Minnesota and you don't have to adapt it to sell it nationwide - just to market it. Roll out a product in Scotland and you cn't count on even the English to want it, let alone the Poles.

Also because a higher proportion of American GDP is spent by consumers, less on social goods and services through the tax and benefits networks.

Thirdly, the cost of living in America is much higher for Americans than it is for visitors because they have to pay so much for higher education and for healthcare and for insurances. So the price of consumer goods has to fall to meet demand to a level that people can afford.

Answer 2

Yes, it's so true. Things that costs £10 here, cost $10 there, or less, and we get nearly $2 for each £1!!

We are the 2nd most expensive countries in the world, after Japan. It's down to the taxes, cost of living, the small amount of land that we live on - basicly, our government and taxing system sucks. Hence, everyone wants to move outta the UK, including me, a hardened Brit at heart. Nuff said.

Answer 3

Economies of scale probably do have something to contribute and so does competition. Marks & Spencer's annual revenue amounts to about $14 billion (a little more than Kohl's). Here are revenue figures for some U.S. retailers: Gap, $16 billion; J.C. Penney, $19 billion; Federated, $23 billion; Costco, Sears and Target, about $50 billion each; Wal-Mart, over $300 billion. As a result, Marks & Spencer, which in Britain stands in a league of its own, would be a modest-size, one-among-many operation in the U.S.

Another culprit could be VAT. Yet another, absence of low-cost producers in the close geographic proximity (as cheap as Poland and Hungary can be, they are still no match for Mexico, Costa Rica, or El Salvador). Yet another, no national health insurance in the U.S. (many U.S. retailers do not provide health coverage to employees). Finally, substantially higher taxes on fuel make gasoline in Britain more than twice as expensive as it is in the U.S., which adds to transportation costs...

Answer 4

It's a viscious circle. Housing costs are so high, that wages need to be high, so retail costs are high, which raises retail prices, which we can't afford, because we pay too much for housing, so we use credit, and then we consolidate the credit on our re-mortgage... AAARRGGGHH!!!

Years ago, I went to Australia, and the prices of specific goods, a particular camera, hi-fi, or TV or VCR where in Aussie-dollars what we paid in sterling. Say £300 for a camera in England, was Aus$300, yet the exchange rate was £1 = Aus$2.5, so 40 pence was one Aus. dollar. Thus, the retail price was massively lower down under, and a real swindle up here.

Answer 5

there is a good number of very stupid solutions right here banging on approximately taxes yet overlook one mandatory element. it fairly is vacationers that warfare with cost differences, the residing standards of the respective electorate is with regard to the comparable through fact the united kingdom has a some distance better wages cost. An Apple Mac is not extra value-effective to a resident in long island because it rather is to a resident in York. I think of maximum folk of solutions are from sick-cautioned individuals as they point out the taxes in admire of healthcare. the quantity of contributions paid to healthcare is plenty decrease than US medical well being coverage and has no bearing on the cost of shopper products. AND btw is a some distance bigger standard of care than the US equipment in accordance to WHO!

Answer 6

Some things, especially certain foods in the us are a lot more expensive then the uk. Most of it is due to the fact that the US is a more self sufficient country, and sources, produces and retails all in one place, unlike in the uk where things are all outsourced.

Answer 7

The only thing you get for cheap in Uk is food, which is crippling farm businesses and making supermarkets stinking rich.

Yes people must learn to haggle (barter) for many more things, i haggle for a pack of cigs, lol, usually i get 20% knocked off, bloody tax.

Answer 8

The UK (and most of Europe) has VAT, which doesn't exist in the US. It's your government ripping you off, not the shops.

Answer 9

It's all in the currency. The US Dollar has lost 50% of it's value since Bush took office.

Answer 10

the uk has high taxes the goverment make a killing as well as getting ripped off