Retailers warn price promotions could take a hit in independent Scotland

Retailers are warning that marketing promotions could be affected if Scotland votes for independence because the cost of operating in the country is higher.

Yes campaign

Speaking on a press call yesterday (11 September), John Lewis’s managing director Andy Street said its “never knowingly undersold” strapline might have to change if Scotland becomes a separate company.

“If Scotland becomes a different jurisdiction and prices in Scotland change then perhaps it would have to change to be ‘never knowingly undersold in Scotland’,” he said.

The head of the John Lewis Partnership, Sir Charlie Mayfield, has also warned that prices could increase in an independent Scotland. At the moment many retailers spread the higher cost of doing business in Scotland across their UK operations. However he said that if Scotland becomes a separate country national pricing might well be scrapped.

“The costs of doing business for most retailers are higher in Scotland than the rest of the UK but most retailers have one price across the UK. In the event of a yes vote that could change,” he added.

Asda boss Andy Clarke echoes that view. He says Asda is currently set up for a single UK market but that if Scotland votes for independence it would introduce a separate Scottish business and prices could therefore rise. That could impact Asda’s 10 per cent cheaper price promise, with the supermarket likely to compare its prices to other retailers in Scotland, rather than across the whole of the UK.

“If we no longer operate in one state with one market and – broadly – one set of rules, our business model would inevitably become more complex. We would have to reflect our cost to operate [in Scotland],” says Clarke.

A number of retailers leaders, including Marc Bolland at Marks & Spencer and Sir Ian Cheshire of B&Q owner Kingfisher have added their names to a letter spelling out how a “yes” vote could impact costs that is set to be released tomorrow, according to the Guardian. However, a number of other retailers are understood to have refused to add their names over fears of alienating customers north of the border.

Shore Capital analyst Clive Black says Scottish consumers may be “miffed” at retailers getting involved in the debate. However, he believes retailers are simply “saying it how it is” and that the Scottish people should be told of all the issues if they are to make an informed choice.

“If independence leads to the greater probability of higher prices then Scots need to take that on board. Treating them as grown-ups makes sense. If it is independence, then they can’t say they weren’t warned if there is differential pricing with the rest of the UK, which appears highly plausible,” he adds.

Read our piece on what a “yes” vote would mean for ad regulation.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here