A number of food and drink outlets including McDonald’s, KFC, Pret, Nando’s, Starbucks and Costa in the UK have decided to slash prices on their food products after the imposition of a VAT cut by the government.
Reliable sources claim that Pret A Manger, McDonald’s and Nando’s are some of the prominent firms that have promised price reductions after chancellor Rishi Sunak initiated a temporary VAT cut from 20% to 5%.
As a result of this move, Treasury forecasts that households could save nearly £160 a year. However, all food outlets are not going to follow this trend. Several companies are anticipated to use this opportunity to shore up finances caused by the nationwide lockdown, rather than slash prices.
Reportedly, the newly imposed temporary VAT reduction is set to be active till 12 January next year. This comes as a part of the package of measures initiated to aid companies to recover from losses and get consumers spending.
Evidently, the VAT cut will be applicable on non-alcoholic drinks and food. Tickets to numerous attractions will also observe some changes due to VAT cut. These attractions include circuses, amusement parks, theatres, cinemas, zoos and museums
As per a recent statement by KFC, the VAT reduction is like a ray of sunshine during the times of economic uncertainty. It is a significant initiative in regard to supporting its teams and restaurants. In addition to this, the initiative could play a crucial role in the recovery of the entire food and beverage sector
Meanwhile, Starbucks intends to pass on the entire 15% discount on coffee offered in the company-operated outlets. Whereas, other licensed venues and shops of Starbucks would be allowed to pass on reductions that best suits their business. Pub chain Wetherspoon, on the other hand, said that it will leverage the tax break to fund cheaper prices on a few of its most popular beers.
Source Credit: https://www.bbc.com/news/business-53411649