Belfast Telegraph

Wednesday 16 April 2014

Big supermarkets giving minister food for thought

The subject of supermarkets is a sticky issue. Their ubiquity makes them easy to knock and when it comes to following the rightful trend of supporting local business people the tendency is to avoid the big names at all costs.

But the defining line in this argument has blurred over the last few years and is now more complex.

It's true that supermarkets are huge competition for local retailers, using their massive economies of scale to secure deals with suppliers - which are hungry for big, regular orders - at levels the corner shop could only dream of.

It's also true that by using this buying power they can squeeze suppliers' margins and make them dangerously dependent on only a few, or in some case, one supplier.

But then local producers - from farmers to processors - continue to supply the supermarkets, so while margins are tight, they must be enough to keep them in business.

And while supermarkets were once accused of ignoring local producers in favour of imported produce, the array of food on offer from the locality has increased tenfold in recent years and they are collectively the biggest buyers from these shores.

On a base level, there can be few reading these words who have not frequented a supermarket, me included, so having an unrefined dig would be a little hypocritical.

There's no doubt our small retailers need support but how that's achieved is a decision Sammy Wilson needs to think long and hard over.

He has come under huge pressure from the supermarkets in recent days.

He could easily have caved in to their demands to ditch the proposed large retailer levy amid threats of investment withdrawals.

But then you can see their point.

On the one hand he's trying to attract inward investment by cutting corporation tax - admittedly in a begrudging manner - while on the other wanting to raise rates for some of our biggest inward investors.

And you can also see why local retailers need help to compete in an increasingly difficult market place and why they're so keen on taxing the 'big boys'.

Some creative thinking is needed by our Finance Minister because the chips are now down.