Inquiry discovers supermarket paradise

That’s it. I’m emigrating. After reading this week’s Competition Commission report into the grocery market, I’m packing my bags and leaving for that gloriously competitive, free, fair, fine and dandy land visited by the wise souls who carried out the inquiry.

Clearly the country where they conducted their investigation bears little resemblance to our own. In contrast to the UK’s supermarket-dominated state where the big four control 75% of food sales, the CC found a fortunate nation where the grocery market is near perfect, give or take a few land banks.

As you would expect in any utopia, market regulators are always on the look out for anti-competitive practices, especially by powerful retailers. But being a fair and free nation, bullying and domination by the biggest grocers rarely occurs there. The sun always shines in this acardian realm where the evils of retail monopoly have been largely eliminated. Supermarket suppliers walk hand in hand with grocery buyers under the benign gaze of the Supermarket Code of Practice.

A few tweaks may be necessary to preserve this ideal state, the CC admits. The code needs a slight readjustment ­ perhaps through the appointment of a supermarket ombudsman ( or woman). This figure would investigate any anti-competitive practices by supermarkets that unfairly affect suppliers. And perhaps supermarkets should be obliged to allow rivals to buy some of the land they are sitting on as they seek to exclude local competition. For even in Utopia, retailers can sometimes act against the public interest.

But by and large, consumers in this earthly paradise are brilliantly served. CC chairman Peter Freeman assures us that the grocery market provides consumers with “value, choice, innovation and convenience”.

How different to our own country, where a supermarket retailer’s idea of value is a no-frills, low-quality product wrapped in ugly white packaging bearing a clumsy great V on it. For anything slightly superior, you’ll pay wallet-emptying prices.

Choice? Oh yes, in the UK you can decide between one or two leading brands or Mr Supermarket’s own-label copycat alternative. Innovation in the hands of one of our grocers involves ripping off a brand owner¹s expensively developed new product, slapping his own name across it and giving it maximum exposure. The branded product just serves as a reference point to guide consumers to the slightly cheaper imitation.

And what, pray, is so convenient about having to get in your car and drive half way across town to buy your groceries? Ah, free car parks, which can only add to the ‘pleasant environment’ that the CC thinks is so important to creating a beautiful terrain.

In the superstore nirvana that the CC spent 18 months examining, brands are sold below cost price by retailers, but this has no adverse impact on suppliers or rival retailers. Why on earth would it?

The CC examined below-cost selling of alcohol by supermarkets during the 2006 World Cup (which that blessed nation won of course, beating Brazil 5 – 0). The top five supermarkets sold nearly £40m worth of below-cost alcohol during the tournament. While the retail giants promote ‘loss leaders’ (often leading brands) because they don’t want to be beaten on price, this is not part of a “broad-based predatory strategy directed at convenience stores or specialist grocers”. Heaven Forfend! Why would they do anything so beastly in such a cheerful, equitable and reasonable place?

These are all reasons why I’m outta here. I too want to live in the nation visited by the CC where competition works just like the textbooks say it should. And best of all, there will surely be plenty of brand marketers also relocating to this utopia.

Their relief will be palpable as they bask in an industry where they are treated with respect by supermarket buyers; where they are not forced to hand over their product secrets to buyers who will use the information to create own label rip-offs; or devalue their brands through below-cost selling; or force them to pay for expensive market research to even get a chance of appearing in a decent position on shelves.

Where can this ideal republic be found? Erehwon -Nowhere.

David Benady

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