SGF response to SNP’s planned supermarket price cap on staple foods

The Scottish National Party has today (16th Apr) announced an election promise to cap prices on essential food items sold in ‘large’ supermarkets. 

The proposed price cap is targeted at a single ‘example’ product line within a category, rather than applied across an entire range, and will only apply to large supermarkets

While local stores that make up the Scottish convenience sector are not considered ‘large supermarkets’, by definition, the policy could create a competitive disadvantage for small local stores and potentially distort the market through changing consumer behaviour.

Luke McGarty, Head of Policy at the Scottish Grocers’ Federation, 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.”

SGF will engage fully with the consultation process and seek to engage ministers on this policy if the SNP are returned to government.