Sir; Notwithstanding that in the UK mobile top-up margins appear to be significantly lower than in the Republic of Ireland, the Vodafone spokesperson completely misses the point with regard to top-up margins (‘Vodafone warned over margin cut’, The Grocer, July 24, p10).
Most community stores rely on a core area of customers. With the advent of mobiles these customers were not gifted with extra amounts of money with which to pay for mobile top-ups. They came out of funds previously spent on profitable items generating 20%+ margins.
The advent of mobiles did not suddenly increase our takings, it simply switched the spend. In the early days, there was a slight benefit from phone sales, money which may have otherwise been spent outside the c-store. But the long-term effect is that each and every week we earn £240 less cash profit on this spend than we would otherwise have done and still the margins go down. Talk about greed.
How many mobile top-up, Paypoint or Payzone terminals have you seen in supermarkets? Maybe the convenience market should pull out and leave the mobile networks and utility card providers to negotiate with the supermarkets and see how far they get. It is only our sadly fragmented industry and devotion to supporting our local customers that allows them to get away with it.