Asda is to pass on the cut in VAT from Monday by reducing the price at the checkout, but will not change its shelf-edge prices until January.
Chancellor Alistair Darling announced the temporary cut from 17.5% to 15% in his pre-Budget statement earlier this week.
Asda chief executive Andy Bond said: “Our customers trust us to pass the savings on in full and so we have decided that the best way to implement these lower prices, and not incur unnecessary costs, is to apply the new rate of 15% VAT at the checkout.”
Posters, point of sale and leaflets around the store will tell customers how the reduced rate of VAT is being applied.
Asda’s move comes after Tesco said it will also implement the VAT cut at checkouts from Friday (28 November).
In order to keep costs down, and disruption to a minimum, Asda has decided to phase in changes to shelf-edge prices once the Christmas and New Year sales rush is over.
This will be completed by January, the company said.
