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Supermarkets Eating on Small Shops’ Shares
Mar 21, 2007
UK’s Association of Convenience Stores, or ACS, has charged supermarkets of pressurizing small players to close and reduce choices for customers. The allegation comes after the Competition Commission produced its initial report on the effect of supermarkets on competition and stated it is concerned over the influence of supermarket at ground levels.
ACS reports that 2,000 independent C-stores (convenience stores) closed during the twelve months to June 2006 as supermarkets creep in the market offering a broad range of products at one place. Over 9,600 independent c-stores, most of them family run businesses, have closed their shutters since 2000.
Most of the criticism has been pointed at the market leader Tesco accounting for 31.5% share of the total market, more than double of its closest rival, Asda. Presently, Tesco takes away £1 in every £8 of consumer spending in UK.
The Competition Commission’s interim report expresses concerns that “the position of the major grocery retailers, individually and collectively, is so strong that it is distorting competition to an unacceptable degree”.
The Competition Commission’s interim report expresses concerns that “the position of the major grocery retailers, individually and collectively, is so strong that it is distorting competition to an unacceptable degree”.
James Lowman, Chief Executive, ACS, stated in news published by Politics.co.uk, “We strongly believe that practices such as below cost selling and price flexing are targeted in a predatory manner and have the effect of closing smaller competitors".
He advised the Commission to monitor the competition and choices across the whole grocery market and not just the big guns of the market. He adds, “Real choice relies on a variety of local outlets, not just promoting competition between the large superstores".
Lowman adds, “Building more superstores would undermine true competition and reduce choice and diversity, especially in rural areas and market towns”.
“Convenience Stores Market – Worldwide (2005-2008)”, a report by RNCOS, says C-stores are generally open for long hours during the day and for seven days a week. Due to their convenient location, the prices of products are slightly higher. This can pose a problem for C-stores in locations where discount stores (sales outlet that offers products at discounted prices, e.g. UK Supermarkets) are successfully employing aggressive marketing strategies to attract more and more customers.
The research report also highlights other major market factors, market value and trends, and total number of C-stores operating in UK. Also, report furnishes the detailed information on global C-stores market with statistical data.
For more information visit: http://www.rncos.com/Report/CP09.htm
For more information visit: http://www.rncos.com/Report/CP09.htm
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