The Scottish Retail Consortium (SRC) has rejected the SNP’s proposal to cap prices for some essential food products, calling the plan a “gimmick”.
Scottish National Party (SNP) leader John Swinney put forward the proposition for statutory price caps in his election manifesto yesterday (16 April) ahead of the polls on 7 May.
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“The escalating cost of living crisis, particularly the sharp rise in food prices, requires targeted intervention to protect people’s ability to afford essentials. This is vital to ensure that everyone can get a balanced diet that meets nutritional needs,” the manifesto document read.
Ewan MacDonald-Russell, the deputy head of the SRC, which is part of the wider British Retail Consortium, kicked back and suggested the government should cut burdensome taxes rather than pile more pressure on supermarkets.
“Many of the costs keeping shop prices high are now arising from the muddle of new regulations and taxes coming from government policies,” MacDonald-Russell said in a statement.
“Rather than recreating 1970s-style price controls and potty gimmicks, public policy should get serious and focus on cutting retailers’ costs so that resources can be directed to keeping prices as low as possible for customers.”
The SNP is calling for mandatory cap on a basket of 20 to 50 essential food items such as bread, milk and eggs at “large” supermarkets to “provide tangible relief to families struggling with grocery bills”.
Supermarkets would be required to cap at least one item within a category but would not have to limit prices across the whole range, according to the SNP.
SRC’s MacDonald-Russell outlined the efforts food retailers are already taking to safeguard consumers from the rising cost of living, noting supermarkets are already operating on fine margins while also supporting their own staff.
“Supermarkets have always run on very slim margins, especially when compared with other parts of the food-supply chain, but profits have fallen significantly in recent times,” he said.
“Even so, retailers continue to invest heavily to keep prices down, expand their affordable food ranges, lock in the price of many essentials, and raise pay for staff.”
MacDonald-Russell again attacked government policy, noting rising costs are often beyond the control of retailers, although he made no reference to the potential supply impacts from the conflict in the Middle East.
“Elevated food prices are a direct result of soaring supply chain and commodity costs and frankly relentless rises in statutory costs imposed by governments,” he added.
“Yet despite this, the fiercely competitive grocery market in Scotland has helped to keep food prices among the most affordable of all the large European economies.”
The Scottish Grocers’ Federation (SGF) also hit back at the proposals, pointing for the potential spread to other food retailers other than the large chains if the plans were implemented.
Luke McGarty, head of policy at the SGF, 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.”
McGarty suggested smaller retailers could be at risk of going out of business if the policy was implemented, as he also took a swipe at government policy.
“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.”
