Profit: is it only about financial gain?

Originally posted as LinkedIn article

A headline in the Daily Telegraph this morning over breakfast caught my attention “Savvy shoppers force down prices.” The article reported that the rising popularity of discount stores has forced prices down by 1.8% over the last year overall and this got me thinking. Have supermarkets given profit a bad name?

Don’t get me wrong it’s been widely reported that Britain has some of the highest food prices in Europe & hopefully discount stores like Lidl and Aldi can bring some equilibrium to the market so this is a positive move in that respect. My concern is that people see the profits made by the “big boys” in retail and apply the same measure to small local shops. Enterprise Rockers reported that micro business owners, which covers many of your local shops, earn 20% less than employees. Yet I know from experience that people who would never go into Tesco’s and ask for a discount if one wasn’t advertised will ask a small local shop for one. This is despite the fact the local shop owner will doubtless have paid more for the stock because they haven’t the bargaining power of the big shops and then still tried to match the prices in order to maintain sales. In other words they will have made less profit but still be the ones approached for a discount.

Let’s not forget that profit doesn’t all go to the business owner either, there’s rent, rates, power bills & staff wages to pay. This applies to all sizes of businesses but Enterprise Rockers reckon 80% of new jobs are in micro businesses so this really matters. We have to allow SME’s in all sectors to make a decent profit, not to make one individual rich but to support our local jobs and communities. My experience shows that SME’s don’t set high profit margins either in terms of percentages or in £ and pence, they choose a reasonable balance which allows them to pay their bills, their staff and make a comfortable living themselves. A balanced profit which values their product or service accordingly but also looks after their customer by not fleecing them because they want to see you again.

So next time you’re dealing with one of your local businesses please remember they don’t make the huge profits you hear about in the news and that discount you’re thinking of asking for could actually affect how many hours they give their staff next week. Give their product or service the value it deserves and help them create more jobs.

I’d really love to hear your thoughts