News that Somerfield is up for sale is a “major blow to consumer interests”, according to James Lowman, chief executive of the Association of Convenience Stores. The sale of the £2.5 billion group is the latest major step in the consolidation of the grocery market, and speculation suggests that bidders for the company are three of the existing big four grocery retailers.
Lowman said: “We have warned about the repercussions of further acquisitions in the UK grocery market. It is this ongoing consolidation of the market into the hands of just four companies that reduces the opportunity for businesses to enter and grow in the market. The lack of choice and diversity that this presents now and in the future is a major blow to consumer interests.
“This announcement comes as the Competition Commission enters the final phase of its investigation into whether competition in the UK grocery market is working in the interest of consumers. The prospective sale of Somerfield – which has 908 stores, including 149 petrol forecourts – would require further formal investigation of the market.
Lowman continued: “The competition authorities should not allow the sale of Somerfield to an existing big four retailer as this will further entrench their dominance of the market. Nor should the authorities allow a fire sale whereby hundreds of shops are sold to the existing dominant retailers. The end result of either is reduced choice for consumers.
“As the grocery market iInquiry nears its conclusion this development has to make them take a long hard look at their work so far and realise that now is the time to act. If the investigation does not make it possible for companies outside the big four to compete and survive in the UK grocery market, it has failed consumers.“