In what some see as an admission of failure, the Office of fair Trading is reconsidering its previous refusal to investigate the convenience store sector.
It was only in August that the OFT declined a request form the Association of Convenience Stores (ACS) to make a market study of the sector but a recent letter to the ACS solicitor has said that there was “insufficient reasoning” three months ago but the situation may have changed now.
Disappointed with the previous decision the ACS lodged an appeal with the Competition Appeal Tribunal over the OFT refusal and a date for a hearing was set for 1st November.
This hearing will still go ahead but the OFT has indicated that it will not offer any defence and will pay the ACS legal costs which appears tantamount to admitting that the refusal was a mistake.
Supermarkets have been able to dramatically increase their convenience store presence (there are a large number in Brighton & Hove) because the OFT considers “top-up” shopping to be a separate market from supermarket shopping.
This may well be the case but the ACS maintains that giants like Tesco can use their supermarket buying power to stock “top-up” convenience stores and it accuses them of selling some products at below cost price to increase market share and damage the competition.
Previous inquiries have found that the supermarkets operate in the public interest in a highly competitive market and the British Retail Consortium has suggested that the problems in the independent convenience store market are wider than just supermarket competition.
Read related items on:
Retail, pubs, clubs and restaurants
Association of Convenience Stores
British Retail Consortium
Office of Fair Trading