GROCERY INQUIRY SHOULD BE THE LAST FOR A LONG TIME - BRC

31 October 2007

The British Retail Consortium (BRC) has welcomed the Competition Commission’s conclusion that “The UK groceries market is delivering a good deal for consumers”.

Responding to the Commission’s provisional findings, published today (Wednesday), the BRC said supermarkets had again been cleared of acting against customers’ interests and there should now be a lengthy moratorium on these costly investigations.

British Retail Consortium Director General Kevin Hawkins said: “This is a sensible and balanced report and rightly concludes healthy competition is good for consumers. It clearly demonstrates there is no systematic unfairness in the way supermarkets treat small retailers or suppliers and, above all, demonstrates our highly competitive grocery market has produced value, choice and convenience for customers.

“This is the third major investigation into the sector in seven years. They are costly and time consuming. I hope this will be the last such enquiry for a long time.”

On supermarket/supplier relationships Kevin Hawkins said:  “The report is a vindication of supermarkets’ dealings with suppliers. It finds no evidence of systematic failure in those relationships.

“The Commission has sensibly rejected prescriptive regulation in favour of possible reform of the existing, compulsory, Code of Practice. Supermarkets will welcome a debate about why it has been under-used, whether it should be extended beyond just the big four supermarkets and whether there should be some sort of ombudsman.”

On the planning regime Kevin Hawkins said: “Planning policy supports the ‘town centres first’ principle but, all too often, this is misunderstood as ‘town centres only’. Local planning authorities are too eager to block suburban development and deny retailers sites. As a result, some communities – often in deprived areas – have limited access to a good quality supermarket.

“Also few local planning authorities are supporting small retailers and most have failed to plan for future retail growth. The Commission is right to recognise that the planning system’s costs and delays hinder start-up and expansion for small retailers.”

On ‘landbanks’ Kevin Hawkins said: “A less restrictive planning regime that enables more store competition would be good for consumers. So - called land banks are largely a function of the current planning regime where good retail sites are increasingly scarce. 

“When a site comes up that a retailer wants to develop now or in the future they will grab it. That may exclude a competitor but that is simply a side effect of the shortage of suitable sites.”