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As inflation rises to 7%, the highest rate in 30 years, retailers, consumers and producers alike are concerned about price hikes across the entire food industry.
In response to consumer concern, George Eustice advised the British public to buy ‘value brands’ from the big four supermarkets.
He told viewers on Sky News, “We have a very, very competitive retail market with 10 big supermarkets and the four main ones competing very aggressively, particularly on some of the lower-cost, everyday value items for households, so things like spaghetti and ambient products – there’s a lot of competition to keep those prices down.
“Generally speaking, what people find is by going for some of the value brands rather than branded products – they can actually contain and manage their household budget.”
According to Rupert Evans, owner of Denstone Hall Farm Shop, George Eustice’s comments advising shoppers to buy value brands to keep within budget are worrying.
He explains, “Firstly, the price of value brands is likely to also be affected by rising costs and inflation but also, this limits the consumers’ choice of local, healthy produce, which farm shops naturally promote. What is also disturbing about these comments is that local food with short supply chains is often cheaper than what is available in supermarkets.
“Farm shops also make buying in small quantities easier – for instance buying a few sausages from a butcher rather than a packet, which reduces cost and food waste.”
Mark Kacary, managing director of Norfolk Deli, echoed the idea that Mr Eustice’s comments were out of touch as he explained that buying direct from farm shops and delis can actually be more cost-effective for consumers. “Small fine food independents have had to face the issues created by Brexit with imports costing more, and we know that the only place any minister is ever likely to recommend to consumers is to go to a supermarket.
“There is no mention of encouraging farmers/street markets. Encouraging producers, farmers etc. to sell directly to the consumer which would cut out the middlemen i.e., supermarkets.”
Maintaining a customer base
With little government support for the fine food retail industry and ministers even recommending shoppers go elsewhere, independent retailers could be in a tight spot to maintain trade.
As Mark explains, “All we can do is to promote our products, promote that we are supporting local support the provenance of the products we sell and target the sector of the market which isn’t that affected by financial crises. Rightly or wrongly our core customer base is unlikely to buy value brands, our core customer base will cook for themselves and will own more than a microwave.
“We are offering a weekly discount on various products which last for a few days and then we switch to something else. We are not in a position to join some form of price war and have to rely on those who wish to eat better and who are prepared to spend a little more if not that often.”
Rupert also suggested retailers should continue to make connections with customers coming through their doors to maintain the USP of indie retail. “Despite the challenges thrown at the farm retail sector over the past couple of years, we have risen to the challenge to support our local communities, which has been reciprocated. Retailers continue to build upon these relationships with their customers and we will do our best to support each other through another uncertain time. Consumers should be encouraged to buy healthy, local produce, which supports their local economy and means buying the freshest most nutritious food.”
Wanting more from government action
After a disappointing Spring Budget report which didn’t offer much in the way of help for fine food businesses, the Environment Secretary’s comments come as yet another blow to the independent sector.
With inflation as high as 7%, independent retailers are increasingly demanding more help from the government, with removing business rates at the top of their agenda. As Mark explains, “I can’t help but feel they could ensure that some of the costs of doing business such as business rates are removed for the foreseeable future. In many ways, this is probably the only option which would allow small independents to keep enough money in their pocket which will reduce the pressure to increase prices on products. It would be hard to suggest that VAT is reduced as not all foods sold in an independent retailer are subjected to VAT anyway. We would be very interested to see if anybody comes up with any alternative ideas which could work.”
Rupert was another business owner left wanting more from government action.“The government should be supportive of independent retailers offering shorter supply chains, that are keeping food on the shelves during these difficult times. Farmers and producers, along with consumers, are facing huge prices in energy but additionally, costs of animal feed and fertilisers have also gone through the roof.
He concludes, “The government should be supporting British farmers, who produce amazing food, look after our countryside and mean we need to import less in these globally uncertain times. Let’s get back to celebrating eating the seasons.”