08 May 2007, 18:02 PM
  • New research from The Association of Convenience Stores (ACS), the campaigning voice of over 33,000 local shops, has shown that supermarkets are systematically obtaining cheaper buying prices than competitors and provides the strongest indication yet that buyer power of the Big Four is distorting competition in the UK grocery market.

The study directly counters the view expressed by the Competition Commission (CC) in its Emerging Thinking that no differential exists between supermarket buying and the rest of the market.

The study, which probed over 300 products sold in both large and small stores, has indicated that ten percent of the products sold on a supermarket shelf are cheaper than the buying price that a wholesaler supplying the independent trade can buy from the supplier.

Furthermore, 74% of the items sold in supermarkets are sold by supermarkets at a price that suggests they obtain lower buying prices than the independent sector.

ACS chief executive, James Lowman, said, “This study shows that in one in ten of cases a small shop cannot buy products from their wholesaler cheaper than they could off the shelf in a supermarket. This is the single most compelling proof that there is a severe competition problem in the market and shows how important it is that the Competition Commission goes further in their probe of relationship between supermarkets and their suppliers. 

“Supermarkets obtain preferential buying terms that are generated not from their volume and efficiencies, but from the ability to dominate their suppliers. This market is not working effectively. If the Competition Commission does not act, the situation will continue to worsen, small competitors will struggle to remain competitive and consumers will lose the choice and diversity that is vital to a strong grocery market and to communities throughout the country.”

Mr Lowman added, “We were astonished when the Commission’s Emerging Thinking suggested there is no systematic differential in favour of supermarkets. This was a reflection of the failings in their early evidence gathering rather than a reflection of what is actually happening in the grocery market. Our study reinforces that view, and it is now up to the Commission to probe further and more thoroughly into the evidence.”