The first signs of pricing intentions by retailers preparing for the GST increase next week have started to emerge.
GST increases on October 1 from 12.5% to 15%.
Research undertaken in the South Island by Dunedin accountancy firm Polson Higgs was released yesterday to the Otago Daily Times and showed most of those surveyed believed they were well prepared.
Tax partner Michael Turner said the results of the research work were probably the best indication of what was likely to happen on October 1.
"What we are seeing suggests that most businesses [95%] believe, rightly or wrongly, that they have plans and systems in place to deal with the GST rate change."
In terms of pricing the research suggested nearly half of businesses were planning to pass on the full GST increase to customers and 26% were planning to absorb some or all of the increase.
However, 11% intended to set prices based on optimal price points, such as $9.95, rather than based on the exact GST rise, and 9% were undecided.
"The results are not surprising, but they do give us some hard data of what is likely to occur," Mr Turner said.
The approach by any business would be influenced by who its customers were - either businesses or private - how price sensitive customers might be and the presence of competition.
Those factors would influence pricing decisions and were undoubtedly reflected in the research results.
"We would encourage all businesses to give thought to their approach to pricing because not all businesses will be able to simply increase prices. People need to be aware of the impact of their decision on cash flow and profitability," he said.
