>>THE ISSUES THAT MATTER, FROM THE PEOPLE INVOLVED
One of the things I have heard a lot from some of those operating in the independent sector in recent years is the need for the UK to introduce legislation similar to the groceries order in the Republic of Ireland as a way of protecting them from the power of the multiples.
I have never really agreed. Instead, I have always felt that this ban on below-cost selling in the Republic was actually working against all retailers, big and small.
To explain why, I think you need to rewind a few years to the point when the hard discounters started scouting the Republic. I bet they couldn’t believe their luck. Their clever sourcing policies meant they were able to offer lower prices than the domestic players on many core lines and not run foul of the groceries order. As the hard discounters grabbed market share, other retailers had to respond. Pricing got more competitive and big retailers in particular increasingly ran foul of the groceries order, even though it was extremely difficult to prove a breach had actually occurred. Those retailers who did end up in court received tiny fines and pretty soon realised they had stumbled on a neat way of being seen as a consumer champion: one trying to lower prices, but being prevented from doing so by archaic legislation.
At the same time, shoppers in the Republic started to believe that the groceries order was keeping prices artificially high. Given the inflationary pressures in the Irish economy, you can understand why people began to complain about the legislation and the fact they were paying for something that was only there to benefit retailers. Cue the ‘Rip Off Ireland’ campaigns which led directly to the decision to revoke the groceries order.
All very messy and all very damaging for retailers, big and small. Not something that we should make the mistake of repeating here in the UK.
Mind you, price really isn’t everything - as we show in the special feature at the heart of this week’s issue, where we name the finest grocers in the world. The retailers on our list are the pick of a fine bunch. They are very diverse businesses, but they have one important trait in common: a genuine passion for food. And that’s what sets them apart from most other retailers.
calling time on the order
Pick of the bunch