Changeover to GST big task

Press, 22 May 1986, Page 16

Changeover to GST big task

By

JOCELYN McNEE

Tuesday, September 30, is going to be a busy night for retailers throughout New Zealand.

On the eve of the introduction of the goods and services tax, retailers will be trying to reprice all of their stock.

From October 1, they will have to mark up all their goods 10 per cent.

While some small stores may be able to change all of their prices overnight, larger stores will take much longer. The chief executive of G.U.S. Wholesalers, Ltd, Mr Ken Daldorf, estimates that the average supermarket will have employ people for 24 hours a day for at least four days to complete the changeover. “The average supermarket would probably have about 6000 lines with about 100 units of each line, so that would mean

repricing 600,000 items. Repricing these overnight would be a physical impossibility,” Mr Daldorf said.

He thinks that stock levels in supermarkets will be low since customers will probably buy a lot of goods in the week before GST is introduced.

Some supermarkets will have a bigger job on their hands than others. Stores with electronic scanning systems will find the changeover easier than those with conventional checkout methods.

Since supermarkets with scanning equipment put codes on their goods, they will have to only alter the price tickets on the shelves.

Under GST, all grocery lines will be liable to a 10 per cent tax rate. This will be added to the original retail price. But according to Mr Daldorf, over-all prices in supermarkets will prob-

ably increase 5 per cent.

Sales tax which has been previously added to some goods will be removed. This will mean items such as soft drinks, ice-cream, confectionery, and some cleaning products will fall in price. Originally they were subject to a 20 per cent sales tax.

It is likely that rivalry between retailers will lessen the impact of the new tax on grocery prices.

“Food will certainly cost more, but you have to recognise that retailing is a competitive business. GST is not going to make that much difference,” Mr Daldorf said. He predicts that there will be a lot more administrative work for retailers. G.U.S. is one of a number of companies which will run seminars for its employees to explain the tax.