How will food retailers cope with the VAT reduction?
It is presently unclear how operators and licensees will react. Trade accountant David Jones predicts relatively few may actually reduce menu prices. Q: Why? A: Jones says the reduction works out roughly at 2p for every £1 and reckons many operators will conclude making changes is not worth the hassle. A £5 menu dish would be reduced by only 10p to £4.90. Retailers may well take the view that the cost of reprinting menus and working in the price change is simply not worth it. Most pubs have now got Christmas menus printed and may well feel the changes have come at the worst possible time anyway. They will have to take care how they word VAT charges on the bottom of their menus. Q: Will customers be expecting a price reduction on food and other non-alcoholic goods? A: Possibly, but it’s a tiny reduction. Many may not argue over £1 on a £50 food bill. Q: Will retailers pocket the 2.5% VAT reduction for themselves? A: Some may, but others could use the cash for customer offers and incenti
