It depends on how much you sell and what your profits margins are, is the only accurate answer to that.

How much you sell depends on where your shop is, for a start. In a well off area, where there are other high priced retailers too, customers are expecting to spend money and may be used to demanding higher quality. In a poorer district, you probably won't get enough customers who can afford your higher priced goods.

However, if products are really poor quality, soon nobody will buy them however cheap they are - there is no point spending even a few pounds on a tool that doesn't work, for instance.

You also have to consider the general economic climate - there is evidence that, in the recession, more expensive quality retailers like John Lewis and Waitrose may be doing better than their cheaper rivals - because some people prefer to 'buy once, buy well' rather than keep buying cheap stuff that doesn't last or doesn't work well, or taste good etc.