Does rip-off Britain still exist? The Bitterwallet price comparison test

3 March 2009

http://img9.imageshack.us/img9/4900/petrolgraph4652769.gif"Never keep up with the Joneses. Drag 'em down to your level. It's cheaper." - RipOffBritain

Coined originally in 1997, the phrase "Rip-Off Britain" has been used to reflect the vast difference in the UK's car prices, when compared with the rest of Europe. But since that time, the phrase has been integrated into part of our everyday language, especially when we've been diddled out of our hard earned cash by crappy goods, poor service or shoddy business practices with exorbitant charges that leave most of us feeling pretty frustrated and angry.

So does 'Rip Off Britain' still exist, compared to the rest of the world?

We decided to look at the actual figures and price difference by comparing 5 popular consumer products, well known and mostly identical all over the world, ranging from Apple Macbooks to the Sony Playstation 3.

We compared the high street price index in the UK, US and France (as a major port of EU purchases), using search engines Pricegrabber, Kelkoo, and Froogle to look for any major deals, but when possible, doing a direct comparison through a universal eCommerce merchant such as Amazon US/UK/Fr to minimize external factors. The currency exchange rates are based on XE.Com.

Here are the results:

Item UK USA (1.40) France
(1.11)
Winner
iPod Touch (16GB) £205 $284.95 (£203) 254,95 (£229.68) USA
Playstation 3 (80 GB) £293 $399 (£285) 399.50 (£359.9) USA
Wii £176 $249.99 (£178) 239.68  (£215.92) UK
XBox 360 Arcade £124.99 $199.99 (£142.85) 179  (£161.26) UK
15" Macbook Pro (250GB) £1,452.61 $1,868.98 (£1,334.98) 1,887 (£1,700) USA

(If you're interested in comparing the iPhone 3G, Andy Peatling does a pretty good job on his blog).

Here some observations on these products and price differences.

Major differences:

  • The Macbook Pro is around £118 cheaper in the USA, but that translates to only about 8% cheaper than the UK
  • The Xbox 360 Arcade is about £18 (14%) cheaper in the UK than the US.
  • None of the products are cheaper in France

The few limited products we look at are by no means an overview of all significant areas in our economy, as they only reflect a slice through the window of perspective that looks at our consumer society and economy. But the results would certainly make John Browett, CEO of DSG International (Dixons, Currys and PC World) proud - his company once denied that consumers were being ripped off in the UK. Good work fella.

Here are some theories as to why this could be the case:

1. Currency exchange: We are taking a bit of a pounding right now with the currency exchange. As of today, XE.Com rates for UK -> US is at 1.4, while UK -> Euro is at a measely 1.11. Compared with the UK -> US rate of 1:2 a year ago and the previously stable Euro exchange of > 1.3-1.4, this difference would add to the discrepancy in higher priced items like the Macbook Pro and PS3.

2. Localization: The UK is one of the few major English speaking countries in Europe. Thus a direct comparison with a country where English is not the primary language could be a factor due to localization.

3. Market size: The US is a huge market relative to France, so with higher volumes, companies like Nintendo and Apple are probably able to negotiate better deals. Alternative, could the merchant, like Apple, be directly responsible for charging higher prices, because they 'can'? Considering the current economic situation, it would be in everyone's interest to cut prices as low as possible to shift stock, so the larger profit margin could be a contributing factor.

4. Customs/duties/shipping: The cost of shipping items and tax/duties/fees could also contribute to the costs. While the recent VAT cuts aren't much, they will still contribute to the actual figures. Freight and shipping costs to a European port like France or Germany will also have different costs. Same with import duties.

Perhaps you have a better explanation? If so, please share them, because I am out of ideas :)

Even if you aren't sure, do share your own thoughts and opinion on where British consumers are continually being scammed. Maybe you have thoughts on the bills we pay for rent, gas, electricity, food, the dentist, council tax... to name a few.

This discussion may give us some answers to our cultural beliefs on whether we feel like we are often paying more than we should, or if we really are living in a rip off culture.

TOPICS:   Consumer Advice   Games   Gadgets

13 comments

  • Alan
    Well, at the above prices, id safely say our prices arent that bad! For a £2 saving of some items, its definetly cheaper than the flight to the usa and the return along with the worry about arriving at customs to be told to pay import fees on some items.
  • Phill
    Hamish Thompson Owner of DSGI? Great Journalism fellas
  • Andrea
    My family and I moved to France last year and we've been shocked at the prices for everyday items - food, toiletries, clothes, electrical goods - you name it, all much higher than their UK equivalents. And their sales and offers are rubbish! However, although goods are dearer, we feel safer and happier. There really is a better quality of life here.
  • Andy D.
    @Phill - piece duly edited. Vince now in the naughty corner.
  • Peter L.
    Uhm I think you got your American prices wrong! In the US they don't advertise the sales tax. When you buy something on Amazon.com up to 10% will be added to the price (depending on the state where the item is delivered to). So basically, price comparison with the US in this article is... incorrect (differences of up to 8% by state!). And wait until the next generation of comsumer electronics arrives. Prices for these goods were set when the pound was till strong (some type of hedging), but in the near future our prices will shoot up (due to the week pound and nogatiated prices). Same for clothes (and cars!)
  • Paul Nikkel EDITOR
    I think if you order from an internet retailer which doesn't have a presence in your state the tax doesn't apply...? Re price going up - yes we are in an artificial pricing environment right now due to the quick collapse of the pound.
  • Andy
    As a Brit in Sweden I thought i'd do the same price comparison here, considering we get rodgered senseless for everything here with 25% VAT on everything and paying £4.60 a pint of beer! All are high street prices converted at the rate of 1 SEK = 0.078 GBP on xe.com iPod Touch (16GB) - £207.40 Playstation 3 (80 GB) - £311.66 Wii - £217.86 XBox 360 Arcade - £151.36 15″ Macbook Pro - £1,443.78
  • Chris
    Interesting theme to this article, but it would have been better had the items chosen for comparison been slightly more varied e.g petrol, milk, bread, meat, gas prices raher than have an electronic console bias. This also seems a little lazily researched...Real Cost of Living Index (RCLI) and the Retail Price Index (RPI) should have been consulted rather than relying on Amazon etc I'm also not quite sure why France was chosen alongside the UK and the US? Surely Germany, as Europe's largest economy should have been chosen? Just my two cents.
  • Paul Nikkel EDITOR
    The idea wasn't to do a proper cost of living index and consumer price index against that. Petrol, milk, bread are pretty difficult to compare exactly. As a site we are interested more in consumer electronics and second they make it easy to compare like for like. Germany tended to be more expensive on a quick look. Thanks for the feedback :)
  • unhappy
    Rip of Britain...mainly lies in utilities for me, council tax and my pet hate the M.O.T...there's no transparency here.....But if you want to check out the bigest rip off ever ....goto ireland ..I came from there origonally...pints 5-7 euro and service is shit also. Tax is unreal and VAT is like 21% now. Houses cost @ least half a million euro in a good area of dublin. Not to mention the price of food...people here have it good....compared to most european countries.
  • Hamish T.
    I'm glad that you've changed the reference to me owning DSGi (though actually I think the business is undergoing real transformation and I wouldn't mind a slice of the action). Duties, tariffs and distribution charges were one of the biggest contributors to price differentials between markets, but one of the factors that tended to get in the way of proper comparisons was the fact that most US prices are quoted before sales tax, whereas in the UK, it is customary for the full 17.5% or 15% as the case may be now to appear in the ticketed price. Even if sales tax was included in the US prices, the level of tax in some states was very low. Hence the perception that UK prices were substantially higher. Today we have a substantially weaker pound, which from a "while stocks last" (ie, certainly short term) perspective ought to help with any international comparison.
  • Jacob
    Whiners. You should try living in Denmark.
  • проститутки �.
    Жрицы любви очевидно живут сексом! Самые сексуальные девченки Киева только здесь!

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