The FSB claims that the report from the Competition Commissions provisional Groceries Inquiry appears to have completely overlooked the issues concerning small independent retailers and focused on issues between the big supermarkets.
The Federation of Small Businesses (FSB) has been campaigning for the Commission to consider the unfair trading situation as far as smaller independents are concerned and to recognise that supermarkets are driving a sharp decline in the number of independent of shops thus limiting choice for the consumer.
But the Commission has decided that the rise of big supermarkets has been good for consumers on the whole. They concluded that many of the benefits to the consumer – including 7% fall in food prices over the past 7 years and over 2000 new products added to the shelves – is due to competition between the big supermarkets.
Almost 25% of all large supermarket stores have either no large competitor at all or just one within a 15 minute drive and the Commission’s main concern was not that there are too many supermarkets but that there are too few.
Hence their proposals to relax planning constraints on big new stores and to make retailers sell their land banks to rivals because some supermarkets have been deliberately buying up land in towns where they have a strong presence to keep out the competition. The “big four” supermarket chains have over 900 undeveloped sites between them.
Furthermore the Commission found that supermarkets do not have an adverse effect on small independents citing a 70% increase in the number of convenience stores between 200 and 2006 with over half being independently owned.
Reacting to the Competition Commission's provisional findings Matthew Knowles, spokesman for the Federation of Small Businesses, said, "This is the third inquiry in seven years but sadly it is not third time lucky. The initial findings miss the point entirely. Competition between the Big Four supermarkets is not the same as free and fair competition across the whole grocery sector. The initial findings focus on declining grocery prices while ignoring the huge reduction in consumer choice that results from the number of small shops falling dramatically. The devastating impact of the current unfair grocery market can be seen on high streets across the country.
"Competition is about consumer choice as well as price and it does not matter how cheap mainstream items are at a supermarket if the only outlets for other goods have closed down. Small retailers and suppliers are being squeezed out because of practices such as selling items below the cost of production, bullying suppliers and increased parking charges in the high street compared to free parking at supermarkets. Once again the shopping public as well as small retailers and suppliers have been let down by the Competition Commission, who seem unable to see past the huge lobbying resources of the Big Four supermarkets."
The report can be found at www.competition-commission.org.uk
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