Posted: 13/06/2022

Supermarket price cuts and wage increases making life tougher for some indies 

Supermarkets are piling pressure on independent retailers by cutting prices and raising wages despite the economic storm.  

A number of the large chain retailers have announced price cuts or wage increases this year as they battle for market share and positive industrial relations amid the cost-of-living crisis. 

This is leaving many fine food purveyors in a difficult position trying to retain and attract customers and staff while costs soar. 

Daniel Williams, project manager at Godfrey C Williams & Son, said the Cheshire business had noticed a direct impact from a local supermarket. 

“We advertised for a cheesemonger for our counter and it wasn’t filled because the local Waitrose was also looking for people and paying more,” he said. “Meanwhile they might have offers on products that we can’t compete with.” 

To allow it to raise wages further, the cheese specialist has tweaked its product range to generate more income. 

“We have gone into English wine, which gives fewer storage issues than cheese and offers a greater profit margin.” 

Although higher value items may attract more profit, retailers have to be mindful of customers’ budgets. 

“Our initial strategy was for most of our wines to be in the £15-£25 range,” explained Williams. “But with the cost-of-living crisis we’ve adapted to offer more wine at under £15 with in-store tastings to show their value.” 

Emma Mosey, co-owner of Yolk Farm & Minskip Farm Shop said the North Yorkshire business has been working hard to find ways to keep employees happy. 

On top of a “significant” wage increase this year, the retailer has increased the staff discount in its shop and restaurant and organised more team events. Taking a long-term view remained critical, Mosey said.  

“In the short term, what the supermarkets are strategising is effective, but if inflation continues to rise, increased costs and wages across the board on businesses of that size are not sustainable.”  

Andrew Goodacre, chief executive of the British Independent Retailers Association, warned the pressure from supermarkets could intensify. 

“There is a real danger that large companies will exert even more buying power – whether it is for stock or for labour,” he said.  

“The cost-of-living crisis is making it harder to retain and recruit people into indie retailing. There is also significant pressure from large companies to keep prices of known-value items low. Once again this will place pressure on the smaller retailer who simply does not have the same power with suppliers.”  

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