I'll use an American analogy to illustrate, and so I'm sorry in advance if it doesn't translate well.
In the Washington D.C. area (where I have several friends working), the restaurants are overwhelmingly high-end. A meal at a standard Panera bread is one of the more affordable options, and costs you somewhere between $12-15. Assuming said person works minimum wage, they're making $12.50/hr. In the longterm, that's really not sustainable, as they're spending an hour of their work-time just to be able to eat during the workday.
Suppose a Subway opens next door, and, additionally, suppose their $5 footlong still existed (it doesn't, but stay with me). The people who previously went to Panera start going to Subway because it's more affordable. Yeah, the Panera suffers, but many of the people that ate there couldn't really afford to eat there in the first place, and would have eventually stopped when their dwindling finances made it impossible.
Now on the other hand, if Subway was our base price and a government-subsidized eatery opens up with complete meals for $2, then yes, I can see how that might be a problem.