Analysts and trade bodies have reacted to the Competition Commission’s emerging thinking document with a variety of concern, dismay, welcome and apathy.

JP Morgan’s food retailing analysis team deemed the document a “non-event” that was good news for Tesco. “The commission does not consider national market share an issue…they haven’t found evidence that Tesco has enough land to achieve 43-45 per cent market share at present and…the wholesale sector does not indicate it is at tipping point in terms of profitability,” said a spokesman. “Overall we think this is a non-event and therefore beneficial to Tesco which has underperformed both Sainsbury’s and Morrisons in recent weeks.”

The Association of Convenience Stores welcomed this first document from the inquiry as “one step closer” to a fairer grocery market.

“[The CC] has identified strong indications of anti-competitive practices in the UK grocery market that need further detailed consideration,” said chief executive James Lowman.

But he said that more could be done on supplier relationships. “Their analysis of the relationship between retailers and suppliers has not gone far enough. They must probe this issue much further,” Lowman added.

The Forum for Private Business bemoaned the lack of a guarantee for anonymity for suppliers coming forward with evidence of abusive practices by supermarkets “The underhand tactics of the big boys are destroying competition in retail as a whole,” said FPB campaign manager Victoria Carson. “…the CC has missed the bullying evident in the supply chain - large retailers are abusing suppliers by changing terms of payment mid-contract.”

Duncan Swift of Grant Thornton Research called for an acceleration of the remainder of the inquiry to halt systemic abuse of suppliers. “Urgent action is needed through a radical reform and the introduction of a Supermarket Ombudsman,” he said. “Only this way will we be able to ensure the long-term future of the UK’s food industry.”

Christine Fisher of Greengrocers’ Campaigner also welcomed the CC’s announcement of a local focus in the next stage of the inquiry.

“We are pleased that it will now look at a local level as we put a lot into our submission about how the supermarkets have been destroying people’s ability to shop in smaller, local shops,” she said.

Topics