The small store industry will have to put up a united front to stand its best chance of gaining anything from the Competition Commission's (CC) investigation into the grocery market, a leading consultant has warned.
Bob Young of Europe Economics, which has been working closely with the Association of Convenience Stores (ACS), believes that the association has "a strong case" that competition in the market is being distorted by the large supermarkets. But he argues that the CC will need to see hard evidence before coming up with remedies.
Young is a former commissioner of the CC in its previous guise as the Monopolies & Mergers Commission and has worked on 30 investigations.
He told C-Store: "The Commission will want to satisfy itself that all views are taken into account, but it has finite resources. There are a wide variety of trade associations and businesses with something to say, but it is difficult for the CC to deal with things at a very small-scale level, whereas the multiples are fewer in number and more coherent."
He continued: "One of the biggest issues facing the small store industry is: how do you put a coherent case together? Some form of representative sample of independent retailers would be very useful to the CC, so that it could understand what makes them profitable and what makes them vulnerable."
The Office of Fair Trading officially referred the market to the CC last week, beginning a process that could take up to two years. The first stage will see the Commission gather as much information as possible about the market, including making site visits to c-stores, supermarkets, suppliers and wholesalers and meeting interested parties such as ACS and symbol groups.
The CC will then publish a 'menu' of key issues for investigation before consulting on possible remedies and finally producing its report.
The CC can demand that companies reveal sensitive information such as the supermarkets' buying prices, although it may decide to keep it confidential.

Topics