The Scottish Retail Consortium (SRC) has dismissed John Swinney’s request for supermarkets to take voluntary action on pricing now ahead of the SNP’s planned price caps on essential foods, claiming that the policy is “redundant”.
After raising retail industry concerns with the SNP’s manifesto pledge to introduce price caps on essentials, the First Minister has today told large supermarkets to “act now” to voluntarily make essential items more affordable ahead of the party’s planned legislation, reports the National newspaper.
The National quoted the First Minister as saying: “The cost of food is through the roof and is hurting people in Scotland right now …
So I am asking the large supermarkets to take immediate, voluntary action today – in advance of the new law being in place this year.”
Ewan MacDonald-Russell, Deputy Head of the Scottish Retail Consortium, responded:
“Mr Swinney can be assured our hyper-competitive grocery food market ensures retailers are already incentivised to keep food prices as low as possible. Any retailer who puts up prices unreasonably would lose custom and market share. That competitive market, along with robust efficient businesses, is why Scotland has the most affordable food prices in Western Europe. This is why we believe a statutory price cap is a redundant policy.
“The reason why food price inflation increases are likely later this year is the dual combination of the conflict in the Middle East and the relentless and ongoing pipeline of public policy costs. If Mr Swinney could support our calls for targeted changes in government policy costs that could make a difference to inflation much more swiftly and effectively than a price cap. The reality is unless cost and inflationary pressures on farmers, manufacturers, and retailers are alleviated food prices will rise. Fixing the cost of doing business is the way to fix the cost of living. We hope the next Scottish Government will work with us on steps that will make a tangible difference.”
The Scottish Grocers’ Federation (SGF) has also criticised the price cap policy, claiming that it could create competitive disadvantage for small local stores and potentially distort the market through changing consumer behaviour.
Luke McGarty, SGF Head of Policy, said:
“While the policy may be aimed at larger retailers, price caps on selected products will inevitably have knock-on effects for similar items sold in local stores.
“Capped prices in supermarkets could encourage customers to travel further to out-of-town locations for staple goods typically purchased locally, reducing sustainability and creating a competitive disadvantage for small local businesses.
“Local stores play a vital role in their communities, providing accessible, lifeline goods and services, supporting local employment, and enabling a local multiplier effect. All within walking distance of people’s homes.
“At a time when local retailers are already under considerable pressure from additional costs added by government regulation and global issues, some may feel compelled to try and match supermarket prices, which could threaten both their viability and the benefits they provide.”
He added that SGF would engage fully with the consultation process and seek to engage ministers on this policy if the SNP were returned to government.
