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Supermarkets’ Buying Power
A recent report suggest some supermarket chains are selling produce cheaper than smaller stores can buy it wholesale. The report by the Association of Convenience Stores (ACS) says that in 10% of cases, smaller stores cannot buy stock from a wholesaler any cheaper than supermarket prices.
The ACS gathered information from a study of 300 products sold by supermarkets and convenience stores, and the results indicate that supermarkets are systematically obtaining cheaper buying prices than smaller competitors. ACS is the campaigning voice for over 33,000 local shops throughout the UK and this report provides the strongest indication yet that buying power of the Big 4 is distorting competition in the UK grocery market.
The Competition Commission (CC) has previously stated that no differential exists between supermarket buying power and the rest of the grocery market. The results of the ACS study clearly conflict with this view: 74% of the products in supermarkets were being sold at prices which suggested they had been purchased at cheaper prices than those available to the independent sector.
A spokesperson for ACS is quoted as saying: “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… if the Competition Commission does not act the situation will continue to worsen.”
www.businessinberkshire.co.uk/supportyourlocaltrader
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