High Street shops

Small retailers in the UK could be put out of business by large chains within 10 years unless the government takes preventative action, a report has warned.

The all-party parliamentary small shops group is calling for an independent regulator to fully investigate the whole retail sector, in a bid to prevent big supermarket chains from taking over the high street.

And it wants a moratorium on retail mergers and takeovers until the investigation takes place.

Stakeholder Response: Association of Convenience Stores  

Association of Convenience Stores chief executive David Rae said: "This is the start of the debate on the future of the High Street, not the end.

 

"This is the first time that the future of the High Street has been considered in real depth within parliament and it is an excellent contribution to the ongoing national debate on the future of local shops.

 

"The all party group has highlighted many of the pertinent issues that ACS and others have brought to public attention in recent years.

 

"The concentration of the grocery market, to the point where four retailers account for over three-quarters of sales, is at the heart of the issues identified in the report.

 

"There are serious concerns about the undermining of wholesale supply to independent stores, the buying power of the major multiples, and the predatory pricing tactics these retailers use.

 

"The onus is now on the government and the competition authorities to listen to the report and to engage in the public debate on the future of the High Street.

 

"Unless the government acts to bring about a fairer market, we fear that independent retailers will continue to struggle, and that many will close. 

 

"As the MPs have crucially pointed out, the loss of these businesses has serious implications for communities and for customers.

 

"The all party group's recommendations are very welcome as far as they go, but they must now be translated into specific actions.

 

"We need a full review of the grocery market, and in the absence of a specialist regulator for the retail market, it falls to the OFT to refer the grocery industry to the Competition Commission in order for this to happen.

 

"We remain focussed on persuading the OFT to allow this much-needed review."

 

 

Stakeholder Response: British Retail Consortium

 

 

British Retail Consortium director general Kevin Hawkins said: "We are disappointed that the committee has not grasped the realities of modern retailing, nor have they understood all the burdens small retailers face with regulation.

"The committee is trying to turn the clock back and reverse some well established trends in consumer shopping habits.

 

"Over the past 30 years or so, supermarkets and other large multiple retailers have grown and become the dominant form of shopping because they have met the changing needs of their customers.

 

"Consumers have clearly voted with their feet.

"Nevertheless, there are still many thousands of independent specialist butchers, bakers and other food shops that are alive and well throughout the UK and many of them will still be around in 2015.

 

"We do not believe that we will see the death of the local shop as described by the all party small shops group. 

 

"Furthermore, the report does not account for the entrepreneurship of the individual retailer and their ability to innovate and change what they offer to compete in the market place. 

 

"IGD research from 2005 showed that the convenience sector out performed the supermarket sector and we are confident that there is a role for this sector going forward.

"The secret of success for the small retailer in what is a highly competitive market, is not to try to compete head on with larger rivals, but to offer consumers something different, something better and something targeted very precisely at a particular portion of the market.

"The committee has entirely overlooked or not understood the critical importance of scale economies, not just in retailing, but in virtually every other sector of a mature economy such as that of the UK.

"No set of regulations can override the drivers of a modern competitive retail business."

 

"However, the BRC does welcome some of the points made in the report, for example their recognition of the importance of the retail sector to the economy and the country as a whole. 

 

"As mentioned in the report, 11 per cent of all UK businesses are retail outlets and 'shopping' is more than a practical necessity; it is now a leisure activity and past time. 

 

"Some of the recommendations made in the report are very interesting, for example the suggestions to the role played by local authorities and RDAs. 

 

"However, we believe that the burden of regulation is increasingly important in this debate and, whilst it affects the whole of the retail industry, it does have a disproportionate affect on the smaller shops. 

 

"Addressing this issue would have a far more positive affect on the sector rather than simply imposing more regulation."

 

 

Stakeholder Response: The Federation of Small Businesses

 

 

Clive Davenport, FSB trade and industry chairman, said: "The report is further proof that small shops are being bullied out of the market and that the OFT must look again at this issue. 

 

"Its conclusions are a welcome step towards addressing the serious issues that face small independent retailers.

 

"We urge the government to take this report seriously and take steps to safeguard the future of independent retailing.

 

"If nothing is done small shops will disappear from the local communities that depend on them and there will be less choice for consumers.

 

"We are very interested in the proposals that the report has put forward. 

 

"We are looking forward to examining them in great detail and to setting out our own suggestions. 

 

"To do so we will work closely with the all party group on small shops and other policy makers. 

 

"That way we can ensure a viable future for the High Street and a wider range of choice for the consumer."