Major retailers are at least temporarily absorbing some of the one percentage point VAT increase themselves in hopes of retaining their cash-strapped customers. Spar Group chief financial officer Mark Godfrey said this week: "There is a very real concern that consumers will experience increased grocery costs, which may well lead to a reduced number of items in the basket as consumers are possibly forced to cut back." He said it would take some time before it became apparent which items were being deleted from shopping lists as consumers tried to cope with the VAT increase by tightening their belts. Godfrey noted that many costs apart from groceries would go up, and an immediate drop in spending on luxury items and impulse buys could be expected. "This will possibly take a few weeks or months to stabilise." The range of zero-rated staple foods will not be affected by the VAT hike, for example brown bread, milk, eggs, maize meal, samp, rice, mealie rice, legumes, pilchards and fruit a...
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