Their costs will be higher if they're a smaller business, but it doesn't necessarily mean the quality of the product or their ethics etc. will be any better (I don't know anything about the brand in question though so not suggesting this in this case). They'll definitely be priced to appeal to a middle class market though, just like Boden, JoJoMB etc.
I do support local businesses where I can to be honest (more so for food), but it's always worth remembering how much the big companies put into the economy too. A LOT of jobs, for a starter. It's not so black and white and I don't agree with a boycott.
This is indeed a great bit of PR for them though. I've seen it shared a few times today. The only reason I heard about them before was because of the ASDA thing.