By NEIL HARTNELL
Tribune Business Editor
and NATARIO McKENZIE
Tribune Business Reporter
Sales at Super Value stores jumped as much as 45 percent on the last day before the VAT hike, its owner revealing yesterday: "Customers were shopping with a vengeance."
Rupert Roberts told Tribune Business that the strong consumer demand - described as "like a hurricane's coming" by one of his store managers - continued through until Sunday, the first day of 12 percent VAT, as Bahamians sought to exploit the supermarket chain's "double Quality stamps" on offer that day.
He added that many customers appeared "pleasantly surprised" that the VAT rate increase was not as bad as expected, suggesting that many had "visualised" a 12 percent jump in their grocery bill when the actual rise was only by 4.5 percentage points.
Emphasising that SuperValue had experienced no transition-related issues, Mr Roberts said its systems had "worked like a dream" in adjusting from the original 7.5 percent rate. He expressed hope that the further change, due on August 1 to accommodate the VAT "zero rating" for breadbasket food items, would go just as smoothly.
"It went very well," the Super Value chief disclosed. "The technology worked like a dream, a charm, and it was very surprising how the customers reacted to it. The store managers were saying they were pleasantly surprised.
"I think the consumer, the customer visualised a big jump; they visualised a 12 percent jump, but it wasn't. It was a 4.5 percentage point jump. They were visualising a 12 percent jump, and it only jumped from 7.5 percent to 12 percent. They were quite pleased."
While weekend sales were aided by government "pay day" falling the previous week, Mr Roberts said year-over-year sales comparisons for one Super Value store revealed a 45 percent - or more than $50,000 - increase in Saturday sales as consumers rushed to beat the 12 percent VAT.
"They were shopping with a vengeance," he told Tribune Business. "I wish we could be up every week like that. Sales go for the week. They were up ten percent for the week, but people didn't start shopping for VAT until Friday.
"I think it was bigger than the 2015 start-up of VAT because the consumers are trained now; they knew they could beat it and shopped heavily. They [consumers] seemed pleasantly surprised; it was not as bad as they thought. They visualised 12 percent, and it only went up 7.5 percent. They were pleasantly surprised and satisfied."
The Super Value chief, taking a $200 weekly shopping cart, said VAT's introduction in 2015 at 7.5 per cent increased this cost to $215. The rate rise to 12 per cent further raises this to $224, a $9 increase that is lower than the jump in 2015.
Mr Roberts, who said he was in constant communication with Super Value's management through Saturday night and Sunday morning, having travelled to Florida at the weekend, said the strong sales trend continued in the immediate hours following the introduction of 12 per cent VAT.
He disclosed that Sunday sales at the chain's Golden Gates store were up 25 per cent, and added: "It continued right through Sunday morning because of the 'double stamps'. Consumers certainly took advantage of the pre-VAT, and the ones that didn't get to take advantage of it shopped Sunday morning for double stamps. I was surprised with Sunday's sales."
Mr Roberts expressed hope that the adjustment for the breadbasket 'zero rating' "goes as smoothly" as the jump to 12 per cent VAT, adding that "there's no question whether that will be accepted" given the savings it promises consumers.
"We only have the pricing changes to face now and we started that today, but we're very disappointed that the Government did not give us the exclusive pricing that the merchant community, retailers and Chamber of Commerce have asked for," he added.
"We could collect a lot more VAT for them, and make more sales. We can't understand why the former government went inclusive, and why this government is going inclusive. That's the way it appears now. The good country to the north, the US, puts it at the end of the tape.
"They go exclusive; all the Wal-Marts, Targets and Best Buys. That might be the right way to do it; the world does it, and the little Bahamas twists it unless they have a change of heart." Mr Roberts recalled how Super Value had to change price tags three times when VAT was first introduced, an exercise that cost it around $500,000.
Marlon Johnson, the Ministry of Finance's acting financial secretary, told Tribune Business that "there doesn't seem to be any major issues so far" with the transition to a 12 per cent VAT.
He added that its introduction on a Sunday had "given a lot of businesses an extra day to prepare", and said: "I've had no one scream at me. As far as I'm concerned it seems to be going OK."
Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation's (BCCEC) chief executive, yesterday said some "hiccups" were to be expected with the VAT increase's implementation, and urged consumers to remain "alert".
Speaking with Tribune Business, Mr Sumner said: "We saw on the weekend there seemed to be a rush on the food stores particularly, and some of the wholesalers, with people trying to get a lot of products before the new rate increase kicked-in.
"There was still a concern that many establishments weren't fully ready for July 1. The government decided to extend some of the terms until August, and in some of the sectors until the end of September. We are hopeful that the extra time will be enough to get other people engaged."
Mr Sumner added that consumers will likely be more conscious of their spending, and scrutinise their shopping bills carefully. "This increase now is going to cause consumers to become more conscious and prudent in their spending and scrutinise their bills more," he said.
"The system is certainly going to create more alert consumers. Consumers must remain alert, and it is important for them to raise questions. We expected that coming into the implementation increase there would have been some hiccups, some organised chaos coming in as point of sales systems had to be adjusted for the increase. and there was also the question about products on the shelves prior to June 30.
"That was part of where some of the confusion came, but the bottom line is as at July 1 every VAT-able service and product is going to be charged 12 per cent."