The retail industry is highly competitive and there is no trace of complacency within it. Over the last 10 years the price of goods in shops has fallen in real terms by 13 per cent. In the last year alone, the price of 200 of the most commonly bought goods fell by nearly 1 per cent.
I challenge other industries to match this performance, which has only been achieved by driving down costs and becoming one of the most efficient sectors in the UK. On what basis can it be claimed that there is overcharging when return on capital employed stands at only 6.9 per cent for retailing, compared with 13.6 per cent for wholesaling and 14.3 per cent for all other services?
The strength of the retail industry and one of the key drivers of its excellence has always been competition. If this is increased as a result of the euro or the growth of Internet shopping, it will be seen by the industry as an additional opportunity and not as a threat.
A basket of goods bought abroad compared to the same basket bought in the UK is often used as evidence by those who argue British retailers overcharge, but whether the comparison is favourable often depends on the choice of products.
There are also a number of key trading differences between countries which expose the bogus nature of many basket-based comparisons. These include obvious factors such as the exchange rate and less understood issues such as the cost of investment in retailing in the UK.
The range and quality of products on offer in the UK has grown significantly over the last 10 years from around 15,000 products available in the large supermarkets to more than 25,000 today. In a recent Mori survey, 78 per cent of consumers said they were satisfied with the quality of goods offered and 88 per cent expressed satisfaction with the range available to them.
It is true that we have intelligent and discerning consumers in the UK and their high level of satisfaction only serves to demonstrate that retailing in this country is first class.Reuse content