The Competition Commission (CC) has identified a 13 per cent buying price advantage for superstores over other players in the grocery retail industry. The finding represents a significant change from initial conclusions in the CC’s Emerging Thinking report, which suggested there was no difference in buying price between big supermarkets and small retailers.
The Association of Convenience Stores (ACS) welcomed the publication of the working paper this week as evidence the commission is at last making progress on the crucial issue of buying prices, as part of its grocery market inquiry.
“The superstores achieving preferential terms of up to 13 per cent should be a massive concern for all of us who promote a level playing field in the grocery industry,” said ACS chief executive James Lowman. “However, there is still work to be done to ascertain if buyers purchasing the same goods, at the same time and in the same volume, get the same prices and terms regardless of their size.”
The commission’s findings corroborate its previous working papers, confirming that anti-competitive supermarket practices are still commonplace. “These practices continue, despite being found to be detrimental to competition seven years ago. It is now obvious that we need a much more effective supermarket code of practice,” explained Lowman.
A commission paper on the entry and exit of stores in local markets, also published this week, is cause for concern for the ACS, which feels it reveals elementary flaws in the commission’s methods.
“This paper draws on data from the Experian-Goad database, which maps retail developments in town centres and retail parks only,” Shane Brennan, ACS public affairs and communications manager, told FPJ. “The paper shows that in town centres there has been a huge decline in the number of specialist stores.”
But only certain types of c-stores trade in town centres, and the paper does not take into account the rural and neighbourhood locations where the majority are based, said Brennan. “The commission has not given us a total overview of the number of convenience stores in the UK, and therefore we suspect that tens of thousands are ignored by the data collection methods.”
“We would be concerned if the commission was to draw conclusions about the state of the c-store market from this data,” added Lowman.
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