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W(NFC): Thank you for agreeing to see us. As you know, we represent the local branch of the National Food Council. We have been asked to talk to you about the high mark up prices in our shops. Recently, food prices have increased very much. In particular, the prices of tinned food products seem extremely high.
M1(R1): Are you referring to certain shops in the district or to all shops in general?
W(NFC): Not just certain shops. All shops in the district. Now we’re used to a mark up of roughly 50%, but we’ve been shocked to find that with most food and household products there’s been a mark up of at least 70%. In a few cases, the mark up price has been 90% of the original wholesale price of the product supplied to you by food processing companies.
M2(R2): But selling food demands special knowledge of the market and long experience of pricing. We don’t raise prices just because we feel like it. A lot of work is done in this field and there’s a lot of discussion before any decision is made with regard to prices.
W(NFC): Yes, but the National Food Council has conducted a large number of surveys concerning the reasons for price increases and the effects of these increases on customers.
M2(R2): I think the higher prices we are charging reflect better services that we give to our customers now, and we know customers want these improved services.
W(NFO): What do you mean by “better services”?
M2(R2): Well, many of us have built larger stores and supermarkets. These have cost huge amounts of money, especially since we have had to buy extra land so we can build good car parks. Nowadays we stock a larger range of goods than ever before. Also, we allow customers to return anything they’re unhappy with. And we now open longer hours, which means paying overtime rates to our staff.
W(NFC): But that doesn’t explain why you make such a big profit all the time.
M3(R3): Today, there’s so much competition that our profits are really very small. Many stores and large shops are left with less than two percent profit on their sales after taxes have been deducted. That’s not a lot of money, you know. We used to be able to count on at least five percent profit, and sometimes even ten percent.