The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Super Value’s president yesterday she cannot “make any promises” that all product prices will reflect VAT’s elimination on unprepared foods at the April 1 deadline given the mammoth task involved in adjusting thousands of goods that account for 80 percent of its sales.

Debra Symonette told Tribune Business that, given the size of the 13-store supermarket chain’s inventory, it is possible it may “have to ask for an extension” beyond the transition date to complete the re-pricing of all shelf items so that they reflect the just-announced VAT reduction from 5 percent to zero.

However, she pledged that - even if the shelf and inventory re-pricing is not completed within the two-and-a-half months allowed by the Government - customers will still be charged the correct cost at the register because the new prices will be contained in Super Value’s computer system.

Suggesting that consumers will be “elated” at the latest tax break unveiled by the Davis administration, given the constant complaints over high prices and cost of living struggles, Ms Symonette told this newspaper that Super Value’s sales will also potentially gain a boost if shoppers redeploy the VAT savings into extra food purchases.

And, confirming that the supermarket chain will likely incur higher overtime costs as a result of the work required to complete the product and shelf re-pricing, she nevertheless predicted that this time will be easier than implementing last year’s VAT cut from 10 percent to 5 percent as all products affected by the Government’s latest move have already been segregated into one goods basket.

“Come April 1 customers are going to be looking for that change. We have to be ready. Whether the shelf [products] is going to be 100 percent changed I cannot say for sure because of the number of items,” Ms Symonette disclosed to Tribune Business.

“Coming down to the end, if we need an extension we’ll have to ask. Even if it comes down to us not being able to change every item on the shelf, everything will be correct in the system so when customer go to the register the right price will be charged.”

Asked how optimistic she and Super Value are about all product prices being changed in time to reflect a zero VAT rate from April 1, she added: “I don’t want to make any promises. I can say we’ll do our best to have everything changed but there is no guarantee because we can only work with what we have and do the best we can.

“The system is not so difficult. That is technology stuff, and they just have to program so that all the items a 5 percent are changed to zero. The difficult part is the pricing of the individual items on the shelf. That takes the time. That could run into… maybe 10,000 items. When you look at even one single item there are large quantities of it possibly on the shelves.

“There are thousands. It could be up to 10,000. I’ll tell you that we looked at changing to just pricing the shelf; putting tags on the shelf rather than individual items, but we found customers like the individual tags. That’s what we’re sticking to,” Ms Symonette added. “We’re going to make an effort to change all the items to reflect the change.

“It would be a whole lot easier for us if we only had to do the shelf. It creates a challenge otherwise in that particular area. It takes a lot of man hours to do that [pricing individual products]. We have a limited amount of staff to do it, and that requires extra time.” Ms Symonette confirmed this will mean Super Value likely incurring increased overtime costs.

She added that the overnight transition from 5 percent VAT to zero on most of Super Value’s sales is “not a difficulty”, and said the latest cut will be simpler to implement than last year’s. “It’s going to be easier because everything is set up in the system, and it’s just a matter of flagged items going to a zero rate,” the Super Value president explained.

“Last time we had to distinguish between the cooked items, grocery items and non-food items. Right now, we find the majority of the sakes, 80 percent of the sales, are the 5 percent items. I am pretty sure consumers will stick to that and buy more of the 5 percent items when they go to zero and they have to pay less because of the reduction in VAT.

“I’m thinking that they’ll use their savings to get more for their money. If they spent $100 before, they can now buy a little more for the same outlay. I’m sure they will appreciate the change in the VAT rate. I guess to some extent it will increase our sales if they use the savings to buy more.”

Ms Symonette said the zero VAT rating will also save Super Value on the cost of purchasing goods from its suppliers. “The consumers are going to be elated,” she added. “I’m sure they are elated because they are going to get this break. I don’t know if I want to use the word ‘crying’, but they have made it clear that they need a break and currently say the prices are so high, so this will get them the break they have been lobbying for.”