Financial expert: Why the Heideschänke keeps prices stable despite an increase in VAT

Financial expert: Why the Heideschänke keeps prices stable despite an increase in VAT

According to a report from www.bild.de, 79-year-old Helga Jäschke, who runs the “Heideschänke” in Radeberg, refuses to pass on the VAT increase from 7 to 19 percent to her customers. She argues that pensioners in particular, who are her regular customers, cannot afford the price increase. She also reports rising costs for electricity, gasoline, food and especially meat.

Helga Jäschke's refusal to pass on the VAT increase to her customers raises the question of how this decision could affect the market and the financial sector. Further failure to adjust prices to rising costs could lead to long-term financial burdens for the landlady. Rising costs and the refusal to adjust prices could reduce the profitability of the operation. This could in turn have an impact on the local economy and the number of jobs, as Heideschänke could be forced to make savings or even close.

It is important to consider that refusing to pass on the VAT increase to customers could potentially have a positive impact on customer loyalty in the short term. Customers may prefer Heideschänke due to its stable prices and consideration of pensioners' financial situation. However, in the long term, rising costs and reduced profitability could force the landlady to rethink its decisions.

It remains to be seen how the situation will develop and whether other companies will make similar decisions.

As www.bild.de reports, Helga Jäschke, the “Heideschänke”, already has many reservations for family celebrations and other events this year. This could indicate that customers value the landlady and her commitment and are willing to accept the stable prices, especially given the uncertainties created by the COVID-19 pandemic.