MENU

Wesfarmers & Woolworths: No problems with GST-free threshold after all

While previous reports had suggested that Coles, owned by Wesfarmers (ASX: WES), and Woolworths (ASX: WOW) were backing a campaign by the Australian National Retailers Association (ANRA) to persuade the government to lower the GST-free threshold on imported goods from $1,000 to $20, according to a report in The Australian Financial Review, the supermarket giants have done an about face and now say bring on the competition!

The change in thinking has certainly left the supermarkets’ discretionary retailing peers, including Harvey Norman (ASX: HVN) and Super Retail Group (ASX: SUL), as well as the ANRA, on the back foot. It’s probably a clever publicity move by the supermarkets, as a much smaller percentage of their sales face direct foreign competition. In comparison, electronics retailers have borne the brunt of online overseas competition and their push to drive up prices for consumers won’t be winning them any friends amongst customers.

Foolish takeaway

Investors shouldn’t expect the dynamic to change all that significantly for retailers if they manage to successfully lobby a lower GST-free threshold. Retailers face much bigger structural issues and challenges and would most likely be better off spending their time focussed on these.

The Australian Financial Review says “good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit.” Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading


Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.