Many retailers still don't know how they will meet the GST rate hike, now just one month away.Accountancy firm Staples Rodway asked retailers about their planned response when the GST rises 2.5% to 15% on October 1.Almost 100 responses were received from
Many retailers still don’t know how they will meet the GST rate hike, now just one month away.
Accountancy firm Staples Rodway asked retailers about their planned response when the GST rises 2.5% to 15% on October 1.
Almost 100 responses were received from retailers across Auckland and Hawkes Bay.
While almost half, (48%) planned to increase prices and 14% said they intended to absorb the extra cost themselves, 28% were undecided about their response to the rise.
A further 4% said they would wait and see what their competitors did and 6% would increase the cost of some items and absorb it on others.
Staples Rodway tax director, Andrew Dickeson, said it would take retailers quite some time to review contracts and update systems to cope with the 2.5% rise.
It required more than changing all the price tags on product overnight on September 30.
“For some that will require a change in marketing strategy as well, particularly with products with a particular price point, like $39.95,” he said
“While 2.5% sounds like a relatively small increase, the reality is that it is actually a 20% increase on GST currently paid, which has the potential to have a significant effect especially on businesses already facing customer push back on prices. “
Retailers who participated in the survey included drycleaners, printers and publishers, jewelers, garden stores, liquor, stationary, homeware, apparel, sporting goods and office equipment retailers,
