The future viability of small forecourt stores is being threatened by the Office of Fair Trading’s blinkered view of the grocery market, according to new reports by the Association of Convenience Stores.
The two reports – one focusing on the decline of independent small shops in Britain and the other on supply chain control – backs the ACS’s call for a total grocery market review.
ACS chief executive David Rae said the research, conducted by Dr Alan Hallsworth at the University of Surrey, shows that the ‘market-liberal’ nature of UK authorities is threatening the diversity of the grocery retail marketplace.
The first report, which includes a comparison of other competition regimes where more pro-active steps were taken to restrict and manage the development of major retailers, shows the UK to be a single market where smaller stores are not able to flourish and superstores are allowed to dominate.
The second concludes that the structure of the UK grocery supply chain has changed dramatically due to factory gate pricing and market consolidation, with the large retailers dictating supply and independents losing efficiencies.
Dr Hallsworth said: “We have a very market-liberal merger policy in this country. Big players are controlling the market, and obtaining better prices. They use that to undercut rivals.”
The ACS is using the research to beef up its argument to the government for a full market review.
Rae said: “We’re asking the government to try and clarify for us what market structure it wants to see – diversity or a market dominated by two players.
“While we have a very strong emotional argument, emotional arguments don’t win over the economists at the OFT, hence the commissioning of the research by the University of Surrey.”