This is an odd policy, but not a new one. What used to be our Remmant Shop - now jewellers, but also selling wool - was doing this 3 years ago.
For me selling patterns is only a small part of my business. Maybe selling 5 to 10 in a good week. I have not raised the price on them since I took over although my suppliers have raised their prices to me three times. I still charge £1.75 a pattern and sell them regardless of whether customers buy their yarn here. But I am still told how expensive they are. I know that the rrp is £2.20 and that is what most retailers charge.
I dare not put up my prices as I know most of my customers would not pay them. I also know that a lot of my customers copy their patterns to pass on to friends and family. Then buy cheap yarn from other places. Although I also try to keep my prices competitive and have absorbed the last 2 price rises from my supplier.
It is incredibly hard - maybe impossible -to make a living from a wool shop. Much as I love doing it, and most of my customers. If anyone asked my advise about opening a wool shop now, I would say - Don’t do it.