By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Super Value’s owner yesterday said the imminent VAT rate cut for all uncooked foods is “more complicated” than previous adjustments because only 50 percent of products will be impacted.

Rupert Roberts, who was joined by BISX-listed AML Foods in pledging that The Bahamas’ two largest supermarket chains will be ready to implement 5 percent VAT on all “edible” foods by the Tuesday, April 1, target, told Tribune Business that this change is more complex for merchants to effect because not all goods they sell will be impacted.

This has meant they have had to divide their inventory into different categories so that scanners and point-of-sale systems can accurately detect which goods are subject to the new 5 percent rate and those that remain at 10 percent VAT. Most previous adjustments have involved an across-the-board VAT rate change, apart from when the Minnis administration eliminated the levy on so-called ‘breadbasket’ foods and medicines.

“It would be so nice for us to go all across the board, or 7 percent across the board. This 50 percent is more complicated,” Mr Roberts told this newspaper. “This is more difficult because it is only half of the goods. It’s only affecting 50 percent that are edible, and we carry all the kitchen and bathroom tissue. Bathroom tissue is not going to be 5 percent. Half the stock will remain at 10 percent.

“We had to do it by category. We want to assure the public we will be scanning at 5 percent the ones that will be reduced and, of course, that will bring some relief. We have it all set for April 1. It’s peculiar because it’s happening on a Tuesday, so we don’t change over on Sunday night. We change on Monday night.”

Debra Symonette, Super Value’s president and chief financial officer, explained that the 13-store supermarket change has temporarily discontinued applying prices to actual products because the imminent switch to 5 percent VAT would force these to be quickly replaced and corrected.

“Currently, we have discontinued putting individual labels on the items and we are just ensuring that the tags are kept up-to-date,” she said. “On April 1, we will commence putting labels on the items again at either the 5 percent or 10 percent - whichever is appropriate. At this time we will also begin to change shelf tags which need to be changed from 10 percent to 5 percent VAT.

“Consumers do not have to worry if individual items are not priced or prices have not yet been adjusted on the shelf tags immediately after April 1. The system will have the correct prices, and the system price is what they will be charged. There will also be price checkers in the stores which customers can use if they wish to check a price before going to the register.”

Ms Symonette added of the transition: “We are in the process of preparing our point of sale (POS) system for the Government-mandated reduction in VAT from 10 percent to 5 percent on edible items. This involves ensuring that each item in the system is flagged correctly so that, when April 1 rolls in, we will be able to make the switch at the ‘click of a button’ and customers will be charged the correct amount at the register.

“We will close at 10% on that [Monday] night and open next morning at 5 percent. On the other hand, the items on the shelves also have to be changed if they fall into the ‘edible’ category. This is not so easy, because our practice is to tag the shelf for every item that is on the shelf as well as put a label on every individual item that is on the shelf. This involves a lot of time and manpower.”

Mr Roberts, echoing Ms Symonette, told this newspaper: “We’ve suspended temporarily pricing those products because, if we price them now, after April 1 we have to price them again. We don’t want two prices on the products. That will confuse the customer. If it scans it will be at the right price.

“We’re trying to make sure the customer doesn’t get confused. I hope all the actors, all the merchants, get it right. If merchants start chipping the consumer on certain items by not giving it there will be problems. If they start giving away gross profit by giving away items the Government does not give them credit for there will be another problem.”

Mr Roberts said the VAT adjustment has come at a difficult time for Super Value. “We are in the process of putting in a new point-of-sale system right across the board,” he added, “and don’t know if 100 percent of the stores have the new one. If this was three months from now it would be easier for us. It’s come at a bad time for us.

“Seventy-five percent of the stores have new scanning and I don’t think the others have it. We’re also transitioning from paper stamps to digital stamps. We’re busy but we can do it.”

Gavin Watchorn, AML Foods president and chief executive, said: “I am happy to report that all of our grocery brands and stores, Solomon’s, Cost Right, Fresh Market and Exuma Markets will be ready when we open on April 1 to pass on the VAT savings on all of the items identified for reductions.

“All items now classified for 5 percent VAT have been flagged in our point-of-sale and, on the day the programme launches, our price shelf labels will reflect the reductions. We are extremely happy to support the Government in their quest to find ways to reduce costs to customers and businesses, and are excited to pass on these savings. Our goal remains to provide customers with greater savings in their overall basket.”

Prices, Mr Watchorn added, will be lower on thousands of products.