British food businesses urged to introduce price-cutting measures by the Government

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4 min read
AUTHOR: Fiona Holland
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David Buttress, the Government’s new cost-of-living tsar, will introduce a campaign in July encouraging businesses to bring in price-cutting measures on food and drink in order to help consumers with soaring inflation.

If businesses successfully reduce the price of their produce, they will earn the right to use the campaign logo and name label in their branding.

The campaign will be promoted via adverts which will be fully funded by the British taxpayer, according to the BBC.

Unlike the Government’s Eat Out to Help Out initiative during the Covid-19 pandemic, funding will not be made available to help retailers with the cost of slashing prices.

This has prompted some concern from industry groups, including the British Independent Retailers Association (BIRA). The organisation has said the campaign will likely negatively impact smaller retailers the most.

Andrew Goodacre, CEO of BIRA has called the campaign “a flawed idea”. He said: “The business tsar David Buttress believes that retailers can cut prices by reducing spend on marketing – a policy clearly aimed at the large retail chains because small indie retailers do not have large marketing spends to start with.”

With smaller retailers already working harder to compete with larger retailers on price, encouraging a price cut will leave many fighting to make ends meet, according to Goodacre.

He added: “This policy also assumes that retailers are adding on all the increases they are experiencing, which is simply not true. Supply chain inflation has been ahead of consumer inflation for some time, and as a result independent retailers have been operating on reduced margins by suppressing the retail prices.

“Add in the huge increases on energy, wages and business rates, and it becomes clear that the idea of further reducing the profit margin is unrealistic.

“We believe that Government intervention is needed to reduce prices and stimulate demand, and the best way is to reduce Vat (as they did for hospitality during Covid). With inflation at 10%, VAT income has been increasing or the government, giving them the opportunity to support businesses and stimulate consumer expenditure.”

Buttress, formerly the CEO of Just Eat, told business leaders from the Confederation of British Industry this week he needed their “best ideas on how to help” with the crisis. Some examples he referenced included “learning from the success of Gregg’s breakfast clubs where free breakfasts are offered to primary school children in need, as well as marketing apps which sell surplus food that would otherwise be wasted – such as Too Good to Go or the UK-based free-sharing app OLIO.

To help consumers afford to put food on the table, OLIO recently announced its plans to work with food poverty and waste charity FareShare to redistribute 200 million meals within the next year with the support of UK food retailers Tesco, Planet Organic and One Stop.

Co-founder and CEO of OLIO, Tessa Clarke, said: “It’s simply wrong that right now millions of people across the UK are struggling to put food on the table, whilst billions of meals worth of perfectly edible food is going straight in the bin.”

“There’s more than enough food in this country to feed everybody, and that’s why we decided to take action. We’re so grateful to those organisations that have already pledged their support and we’re calling for others to do the same as a matter of urgency.”

The food businesses will give their surplus goods to OLIO’s network of over 50,000 volunteers, who will then list the food on the app. Local community groups can then come and collect the items for no extra cost.

Neil Thomas, Head of Transformation at One Stop said: “In the past year we have donated 710,000 equivalent meals. We will be working closely with OLIO to increase this number, galvanise awareness and create pressure in the industry in order to reach more people who need this both now and in the future.”

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