Supermarkets: prices will rise if Scotland votes yes
Charlie Mayfield, chairman of John Lewis Partnership, which owns Waitrose, and Andy Clarke, Asda president and ceo, both said that Scotland could expect higher prices, if Scots voted on Thursday September 18 to quit the union.
Mayfield, responsible for nine Waitrose stores in Scotland, warned of what he termed “economic consequences” if the yes campaign was successful. “It costs more to trade in parts of Scotland, due to regional factors and transport costs, which are absorbed at present,” he told BBC Radio 4’s Today programme. “With independence those costs would be higher … [leading to] … the likelihood of higher prices in Scottish stores.”
The John Lewis boss went on to say the partnership between Scotland, England, Wales and Northern Ireland had served its members well. “I do regret anything that will create divergence into two markets.”
‘I do regret anything that will create divergence’
But Scottish finance secretary John Swinney dismissed suggestions of higher prices if Scotland voted for independence. “Charlie Mayfield is entitled to his opinion,” Swinney told the same programme.
“I think the argument is one that is firmly contested by other retailers who do not take the view that has been expressed by Charlie Mayfield.”
Later in the day, Clarke – while acknowledging the referendum was a matter for the people of Scotland – said, as a business leader, he could not remain a spectator. “I would be ducking my responsibility if I didn’t offer an honest assessment of what independence could mean for Asda,” he said.
If Scotland votes for independence, Asda claimed it would be forced to set up a separate Scottish business. At present, the retailer’s systems were set up for one single UK market, using the same currency and rates of VAT. Operating in a market, serving 63M customers, was said to deliver major efficiencies and economies of scale.
“If we were no longer to operate in one state with one market and – broadly – one set of rules, our business model would inevitably become more complex,” said Clarke. “We would have to reflect our cost to operate here,” he said.
‘We would have to reflect our cost …’
“This is not an argument for or against independence. It is simply an honest recognition of the costs that change could bring. For us the customer is always right and this important decision is in their hands.”
But Britain’s fourth largest supermarket raised the possibility of a yes vote resulting in lower food prices in Scotland. After making clear Morrisons was neutral on the topic of Scottish independence, a spokesman told FoodManufacture.co.uk: “We have consistently said that if the cost of doing business was to change in an independent Scotland due to government policies then Morrisons would have to consider raising or indeed lowering prices in that independent Scotland to reflect those differing costs.”
Former Sainsbury boss Justin King warned a yes vote would lift food prices, stall investment and impact Scottish food producers. "It is more expensive to do business in Scotland today,” King told BBC News. “Business rates are higher, distribution costs are higher.
“If Scotland was to be an independent country, with businesses run separately in Scotland – as inevitably will be the case – prices would be higher.”
The Royal Bank of Scotland has confirmed its decision to move its registered headquarters to London in the event of a yes vote next Thursday. The bank said the decision reflected “the material uncertainties arising from the Scottish referendum vote which could ahave a bearing on the bank's credit ratings and the fiscal, monetary and regulatory landscape to which it is subject”.
Meanwhile, John Lewis Partnership reported profits up by 12% at £129.8M yesterday. Waitrose sales climbed by 1.3% but operating profits fell by nearly 10%, reflecting the costs of opening 15 new stores.
