Supermarkets Launch VAT Price War

Tesco has announced that it will implement the VAT cut three days early on a range of products in an effort to help customers reduce their Christmas shopping bills.
The supermarket giant said it would pass the VAT reduction announced in the pre -budget report on to all applicable non-food products, including electrical goods, home entertainment and clothing, from Friday.
Officially the temporary 2.5 per cent cut in VAT from 17.5 per cent to 15 per cent does not come into effect until Monday.
Tesco commercial director Richard Brasher said: “We know that many families will start their Christmas shopping this weekend as pay packets arrive and we don’t want customers to miss out on the cut in VAT which comes in on Monday.”
The prices on Tesco’s shelves will not reflect the cut. Instead, it will be implemented at the checkout. Online shoppers will also get the benefit from Friday.
In addition, Tesco said it is cutting the price of 1,000 products, including beer, wine, some malt whisky and Children’s bicycles, by up to 50 per cent, claiming the price cuts could save customers £200 on their Christmas present list.
Sainsbury’s has also moved to rush forward the government’s cut in VAT . The company announced that from tomorrow morning shoppers will be able to save on clothing, electricals, homeware and entertainment .
“Since our announcement on Monday that we would pass on the full benefits of the cut in VAT to customers, we have been working hard to implement the new lower rate as early as possible,” commented Sainsbury’s customer director Gwyn Burr.
“This is great news for shoppers because in many cases the rate cut will be in addition to discounts that have already been applied to everything from TVs and toasters to DVDs and laptops .”
Critics have claimed that the VAT cut will make little difference, as customers buying £500 worth of electrical goods will only save just over £10.
However more retailers across the UK are expected to announce similar moves in the coming days as the pre-Christmas sales price war intensifies.

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