Competition Commission Remedies Could Herald Extinction Of Local Stores

29.04.08

The long awaited report concluding the Competition Commission inquiry into the groceries market could condemn local shops to oblivion if its earlier proposals are confirmed. [1]

This is the view of the Campaign to Protect Rural England (CPRE) [2] as it awaits the Competition Commission’s announcement expected tomorrow (Wednesday).

‘The Commission has been narrowly focused on competition between the big retail giants. It looks set to do nothing for the small shops and independents being squeezed out of the market by the big four,’ said Graeme Willis, local food campaigner at CPRE.

‘To prevent market domination the Commission is expected to propose a local competition test. But this wouldn’t stem supermarket expansion and the further erosion of the character and vitality of our town centres.’

After 23 months of the groceries market inquiry the local competition test is expected to be the major planning remedy. This would stop a retailer with 60% of existing retail space in a local area from opening more stores there. [3] But this test could prevent a few large stores being opened by one giant retailer only for more to be opened by another. And if the threshold is set so high, it is unlikely to stop so-called ‘Tesco towns’ from spreading, let alone reduce the pressure on smaller grocery businesses or halt the loss of local shops.

‘The Commission has accepted that the concentration of the grocery trade in the hands of the few significantly harms shoppers. [4] Yet it has offered little so far to stimulate real choice and variety in the high street. The Commission has failed to put forward strong tests on diversity or on appropriate scale for new developments which could stimulate local markets with stores of all sizes, kinds and levels of service.’

Graeme Willis concluded: ‘In its efforts to limit domination by one supermarket chain, the Commission could be leaving the big chains to capture the market, leaving our towns and shoppers with less choice and just more of the same.’

NOTES FOR EDITORS

1. The Competition Commission published its Provisional decision on planning remedies for the groceries market in February 2008.

2. CPRE, the Campaign to Protect Rural England, is a charity which promotes the beauty, tranquillity and diversity of rural England. We advocate positive solutions for the long-term future of the countryside. Founded in 1926, we have 60,000 supporters and a branch in every county. President: Bill Bryson. Patron: Her Majesty The Queen. www.cpre.org.uk

3. Competition Commission Groceries Market Investigation Provisional decision on planning remedies pp56-57: ‘If the grocery retailer proposed for the development has a share of net grocery sales floorspace (including the proposed development) of less than 60 per cent, the development would be considered acceptable under the competition assessment.’ February 2008.

4. Competition Commission Groceries Market Investigation Provisional decision on remedies: background and overall assessment p17: ‘Moreover, in our provisional findings we noted that reduction in the choice of fascias available to consumer is a significant element of the detriment to consumers that arises from high levels of concentration in local areas.’ February 2008.

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