Greater competition between UK supermarkets

The Competition Commission has now published its report on the grocery sector and is calling for greater competition between UK supermarkets.

The report focuses on the effect of competition from a consumer perspective but, amazingly, neglects to take into account the impact of large supermarket dominance on the smaller retailers that are still struggling to keep up.

It dismissed suggestions that the largest player in the sector, Tesco, is too dominant, saying that other retailers are still able to compete. Unfortunately, these ‘other retailers’ are mainly the bigger supermarket chains.

Large supermarkets control just under 75 per cent of the grocery market and small retailers and family firms, which lack the buying power enjoyed by the big names, are left wondering how to make ends meet in the face of such dominance.

This is bad news not only for food retailers but for a whole range of smaller shops. Tesco and the like sell a range of products that extends beyond food. They can afford to sell them cut-price or even at a loss to increase market share and such practices cut into the profits of various smaller businesses, from newsagents to florists.

According to the FSB, an all-party group of MPs has estimated that by 2015 there will be no independent retailers on the high street because of the unfair competition that they face from the supermarkets.

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