Recent financial results by major players in the UK grocery industry seem to point to the ever-increasing consolidation of grocery retailing on the UK High Street, but is this actually in the consumer’s interest, and is it what the consumer really wants? Dr Alan Hallsworth of the University of Surrey School of Management has been looking at trends in UK grocery retailing in the UK for over 25 years and comments, ‘ consumers display ambivalent attitudes towards retail change. There is a residual fondness for the corner shop and most hope it will still be there should they need it. However, modern car-dependent shopping behaviour works against small shop survival. What we want for the long term may not survive our behaviour in the short term.’
In 2000, in a ruling by the Competition Commission, it was implied that there are actually two distinct and separate markets; major retailers in which people tend to do their main weekly shop; and convenience stores or traditional corner shops and high street stores. The underlying assumption was that the two sectors did not take trade from each other. The ramifications of this ruling mean that while the major supermarket chains may now find it very difficult to buy each other out, they can still increase their market share by buying out convenience store chains. This was the case when Tesco was unable to purchase Safeway due to competition rules, but later was able to buy out independent retail chain T and S (better known as One Stop).
A further issue raised by the ruling means that if any of the major multiple grocery retailers were now to get into financial difficulty, they would most likely be bought by foreign companies as their UK competitors would, in most cases, be barred from doing so because of monopolistic concerns.
Stuart Miller | alfa
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