Unity is my theme this month, as in “united we stand, divided we fall.” We have collaborated very effectively over recent years with the Association of Convenience Stores (ACS), and because it represents wholesalers’ retail customers there is a natural bond between us.
Earlier this month ACS published its full submission to the Competition Commission for public consumption. The 54-page document was compiled not only with FWD’s help, but also that of the Scottish Grocers Federation (SGF) and the Northern Ireland Independent Retailers Trade Association (NIIRTA). This group represents a strong alliance with a clear and united voice in support of the wholesale/independent channel.
The submission centred on three major areas of concern. First, the inaccurate definition of the grocery marketplace used by the competition authorities to assess acquisitions in the convenience store sector. Second, the ever more concentrated buyer and seller power of the supermarkets. And lastly, that the planning system is an ineffective check on the further dominance of the major supermarkets. The full text can be found at (www.thelocalshop.com). Other like-minded organisations putting in submissions include the National Federation of Retail Newsagents and the Rural Shops Alliance.
The unity displayed by those on our side of the argument is in stark contrast to the divergent submissions put into the CC by the Big Four supermarkets. These were posted on the CC website recently and are notable mainly for their variance. Tesco went against the other three most surprisingly by calling on the CC to do away with the current market distinctions between “one-stop” supermarket shopping and “top-up” convenience shopping. However, Asda, Sainsbury and Wm Morrison ganged up against Tesco, saying planning laws should be changed to promote more competition and stymie Tesco’s remorseless expansion.
Where they did come together was to deny that their buying power caused any problems for smaller retailers, or that the wholesale/independent channel was under any threat. Well, they would say that wouldn’t they? What was most telling was the scant attention they gave to three of the OFT’s areas of potential concern – price flexing; their relationships with suppliers and their entry into the convenience market. Instead, they focused heavily on planning regulation.
It is fortunate therefore that the CC has been given enormous volumes of pricing data from all the parties involved. This may reveal the truth at last.