24 January 2008, 19:20 PM
  • Although the Competition Commission has yet to publish its final report, it already looks set to be out of date as plans for a Somerfield takeover bid will cause change to the grocery playing field once again.

It seems Government reports are moving too slowly to keep up with the changing face of retail. Somerfield is the fifth largest supermarket chain (Competition Commission figures show it with 1118 stores and 3.5% market share) in the UK and also owns the Kwiksave brand,  so any move for a takeover will have a huge impact. 

Somerfield is one of the four “mid-rank” grocery retailers that slot in behind the “Big 4”. Even added together, Somerfield, Waitrose, Marks & Spencer and the Co-op Group in total only have about the same market share as Sainsbury. Of the “Mid 4”, M & S and Waitrose both have an up-market “niche” stance. So, together with the Co-op, Somerfield represents the most direct mass market competition to the “Big 4”. The disappearance of Somerfield and the addition of over 1000 of its stores to one or more of the “Big 4” would make the gulf between them and the rest even wider. Therefore, ownership of Somerfield matters.

Ken Parsons, chief executive of the Rural Shop Alliance, said, “The potential takeover of Somerfield would almost certainly weaken competition in the UK grocery market. This is really a wake-up call for the Competition Commission. Are they prepared to see the 5th largest player disappear from the market? What level of market share are they prepared to let the Big 4 achieve before they intervene?”