On 4 January 2011 VAT will rise from 17.5 per cent to 20 per cent, following the Coalition Government's emergency Budget in June 2010. What kind of impact will this have on retailers and how can a smooth, cost-effective outcome be ensured? The VAT rise will affect everyone especially retailers. Every item of stock will have to be repriced and labels ready on the shopfloor come 4 January. This process is expected to cost retailers approximately 35 million according to a survey made by Her Majesty's Revenue and Customs (HMRC) in 2009.
Staff at a store which contains 10,000 items is likely to spend more than 50 hours relabelling items by hand. However according to industry leaders Avery Dennison, with the help of an automated labelling and printing solution, the time spent repricing items can be halved instead of approximately 20 seconds per item we estimate that this may be reduced to as little as 10 seconds per item, and this is a saving which, in today's economic climate, businesses cannot afford to ignore. Retailers need to plan and prepare the relabelling strategy in advance the VAT rise takes place at retail's busiest time of year, the Christmas rush shortly followed by the January Sales, when relabelling is already a significant task. Each member of staff needs to be on the shopfloor and customer service needs to be at its best in order for retailers to increase their sales during this demanding period.
HMRC acknowledge the difficulty involved in reconfiguring till systems and stock-control software and recognises the need for retailers to seek professional advice from the experts when implementing company-wide system changes.
An HMRC external survey, conducted in 2009, asked a wide range of businesses to detail the activities involved when dealing with a VAT rate change. The results show that the re-pricing and invoicing changes are expected to cost 35 million while system changes are expected to cost 85 million.
Avery Dennison offers a dedicated service consulting with the retailer to find out exactly what is required before providing a complete, hassle-free solution for printing and labelling. Avery Dennison ensures the repricing process is as simple and efficient as possible allowing retailers to be fully prepared for the VAT increase and free to focus on their customers.
Avery Dennison's solutions have been shown to save staff time by reducing the workload and errors involved in relabelling items. Jean-Marc Alter, EMEA Sales Director at Avery Dennison Retail Information Services, said: "We provide a customised solution that works seamlessly for retailers offering assistance and consistent support at the first assessment and throughout the lifetime of the solution. As one of the best printing and labelling solutions available, this will allow your staff to concentrate on the important task of helping customers, selling products and attending to the tills during busy periods. With the VAT rise rapidly approaching, now is the time to ensure your company can deal with the relabelling process smoothly and efficiently."