But you won't be charging 50% more will you ? so your arguments is on shifting sand. SOME people buy on price alone, most people don't. The odd 10p is actually neither here or there for most people if they are buying one or two items - they would rather shop in a nice environment with nice staff and pay 10p extra for their cornflakes than slum it.
But I digress, you obviously know your business far better than anyone else and you should be able to work out the type of cutomers who come in your shop. All we are saying is don't assume that cheap will win and don't assume that price is everything. Even the big boys (Tesco and Asda) have realised that the silly price war doesn't help anyone, least of all their profits, while Sainsburys have been ignoring it all with dignity and the ocassional side swipe. Waitrose don't seem bothered when Aldi opens up down the road and even Morrisons are begining to back away from the "cheapest is best" route apart from a few loss leaders and offers funded by suppliers.
Somebody will always undercut you and, as banned said, once you start being drawn into the fight you will need deeper pockets than your competition and it will distract you from building your customer base.