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Independent retailers have been left reeling after the Competition Commission (CC) rejected almost every one of the sector’s concerns over the competitive advantage of the major supermarkets.
In the provisional findings of its 18-month inquiry, the Commission Inquiry Group said it had found “no evidence” that smaller stores were significantly disadvantaged by the activities of the multiples.
Chairman Peter Freeman said: “We have looked carefully at the concerns that have been raised with us regarding small shops. The evidence is that convenience stores and specialist grocers that provide consumers with a strong retail offer will prosper. This is not to say that life is easy for small retailers, but we do not see any evidence of unfair distortions in competition between large grocery retailers and small stores.”
The findings amount to a dismissal of the views of independent retailers and their representatives, who feel they have presented clear evidence of an uneven playing field in both the buying power and the anti-competitive tactics of the Big Four supermarkets.
In a further blow to the sector, the Inquiry concluded that below-cost selling by national retailers was not part of a predatory strategy to target convenience stores and did not have a significant effect on smaller stores. It also said there was insufficient evidence to suggest that supermarkets had used local vouchering schemes “with any intention beyond normal competitive behaviour”.
It also rejected suggestions that a ‘waterbed’ effect, where suppliers offering lower prices to larger volumes customers compensate by raising costs to smaller buyers, was disadvantaging small stores. “Large retailers do not always get the best price from suppliers,” said Freeman. “Convenience and specialist store numbers are not in such a state of decline to suggest that such an effect exists.” The Inquiry further shocked the sector with the suggestion that a more comprehensive code of practice for supermarkets might also be widened to include symbol groups.
In a further kick in the ribs for the independents, the CC concluded that Tesco was not in such a strong position that other retailers could not compete. “Tesco’s purchasing cost advantage, share of national grocery sales and expansion into convenience store retailing is not acting as a barrier to expansion by other grocery retailers,” it said.
The commission found that consumers have good choice between retailers in most areas, “but in a number of local areas more competition would benefit consumers”. It suggests introducing a competition test into the planning process that will allow the position of existing supermarkets to be taken into account.
Rural Shops Alliance response
Federation of Small Businesses response
Commission targets planning rules
It's not over yet
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Well, well, now isn't this a surprise - the CC has ignored the small retailer once again. This just adds the growing concern among independents about rising wages, increased pressure from authorities, rates rising and now the only lifeline we had, the Competition Commission, ignores us. Sometimes it makes me wonder when people will see what effort we put in just to have it spat back in our face.
Did you really expect anything positive from the commision report? I have no political yearnings either way but I am amazed how this a labour goverment ( you know supposedly the working man's party ) has trodden on the lower paid and small business operators with extensive taxation , red tape and a legal minefield.
Soon the nation will be made up of only mega-corporations and benefit claimants as both the overtaxed, unskilled worker and small business is driven out of the employment arena.
That's it, I've had enough, you should all give up and get a proper job, perhaps for one of the supermarkets and maybe try to change it from within if you feel so inclined, at least you will get paid a proper wage and work normal hours!
I am an independent deli, until recently working in a very rural high street with a Co-op and a Spar on either side. The town is expanding at an incredible rate with houses going up all over the place. Most will be taken by incoming commuters, who shop mainly out of town, as locals can't afford the prices. Although the catchment is not quite large enough for a big supermarket yet, and there is no suitable space anyway, this doesn't stop them and there are Tesco vans all over the place and more coming in every day. I don't think it will be long before we see a M&S or Sainsbury's here on the High Street.
The vast amount of the population in this country do not want independents and they won't be happy until there are none left at which point they will deserve all they get... not that they will care. This is democracy in action.
I'm retiring from this game and emigrating to a better place!!
Peter Freeman is the true winner of his enquiry.He has no doubt been paid handsomely for his efforts, which really mean nothing to the high street! Ten years from now when all these old high streets that have been burdened with planning issues for the independent trader are full of either charity shops or junk, will he then repay his fee with interest? He will probably be living somewhere abroad!
I for one will be there too, my shop is destined for the bin. This government has lost the plot.
Why is everybody surprised about the results of the Competition Commission fiasco? It was a poor strategy, to push such a weak case.
One good thing could come out of this - all the people involved in pushing this strategy should now be SACKED, and a fresh approach from different people should be tried. There are plenty of ideas out there from retailers, you just need someone capable of listening.
The NFRN and the other parties concerned are taking a very naive approach to the whole problem. Okay, the Supermarkets have an unfair buying advantage, they stockpile land,and all the other crap.
Kick the Supermarkets where it hurts. PARKING. The Tories have already suggested putting a form of tax on supermarket parking spaces.
Why aren't the NFRN etc pushing this point a lot more vigorously or something even better? There are numerous other points that can be used to fight the supermarkets, I can think of DOZENs, even the Tory party can come up with better ideas.
I am the last remaining Retailer in an area of six villages, and unless the trade associations etc, get their finger out, there will be none.