It has sent a dossier of new research by Europe Economics to the Office of Fair Trading, citing evidence that supermarkets’ expansion into the c-store sector is causing a barrier to entry for independent retailers. The study found that supermarkets’ buying power was causing a ‘waterbed effect’ as suppliers tried to recover the margins lost to the multiples from smaller companies, while it also pointed to below-cost selling - particularly on fuel and Easter eggs - and tactical promotions in competitive areas, through the use of discount vouchers.
Last November, the ACS launched a campaign demanding an inquiry, and together with backing from Friends of the Earth, farmers’ pressure group FARM and The National Federation of Women’s Institutes, submitted a formal request for a market study. It believes the last inquiry into the market - by the Competition Commission in 2000 - found practices that were against the public interest, and that the situation had worsened considerably since then, with consolidation concentrating even more financial power into the four major multiples.
ACS chief executive David Rae said: “We believe this information forms a compelling case for a full review of the grocery market.”
Recent figures from the IGD and William Reed Publishing reveal a marked decline in the number of unaffiliated independent retailers - down from 29,030 in 2004 to 26,873 this year.