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Findings from the Competition Commission's Inquiry into Supermarkets

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  • Douglas Cooper

Abstract

This paper summarises some of the findings from the Competition Commission's report into supermarkets. First, the paper explains the background to the inquiry. It then presents data showing national and regional concentration, and explores indicators of profitability for the major UK supermarkets, to see if these indicate patterns of excessive profitability. It discusses whether international price comparisons have any role to play in the assessment of the competitiveness of this market. It then addresses pricing issues, particularly: company pricing strategies, evidence on price leading and matching, below‐cost selling, and differential pricing between stores in a chain. The paper then turns to the other main area of the report ‐ supplier relations with supermarkets. A large number of practices were found where supermarkets unreasonably exerted their market power to the detriment of those suppliers and competitors, and because of this the Commission recommended that the OFT should negotiate a code of conduct to govern supermarkets’relations with suppliers. The nature of these practices and the reasons for their being found against the public interest are explained.

Suggested Citation

  • Douglas Cooper, 2003. "Findings from the Competition Commission's Inquiry into Supermarkets," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 127-143, March.
    • Handle: RePEc:bla:jageco:v:54:y:2003:i:1:p:127-143
    DOI: 10.1111/j.1477-9552.2003.tb00054.x
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    Cited by:

    1. Li, Lan & Carman, Hoy F. & Sexton, Richard J., 2005. "Grocery Retailer Pricing Behavior for California Avocados with Implications for Industry Promotion Strategies," 2005 Annual meeting, July 24-27, Providence, RI 19498, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Dengjun Zhang & Geir Sogn-Grundvåg & Frank Asche & James A. Young, 2018. "Eco-Labeling and Retailer Pricing Strategies: The U.K. Haddock Market," Sustainability, MDPI, vol. 10(5), pages 1-13, May.
    3. Francisco Galera & Pedro Mendi & Juan Carlos Molero, 2017. "Quality Differences, Third-Degree Price Discrimination, And Welfare," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 339-351, January.
    4. Cesar Revoredo‐Giha & Alan Renwick, 2012. "Retailers Price Behavior in the UK Fresh Fruit and Vegetable Market," Agribusiness, John Wiley & Sons, Ltd., vol. 28(4), pages 451-468, September.
    5. Johan F.M. Swinnen & Anneleen Vandeplas, 2010. "Market power and rents in global supply chains," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 109-120, November.
    6. Xia, Tian & Sancewich, Brian, 2012. "Retail Markets and Buyer Power in Agricultural Procurements," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124929, Agricultural and Applied Economics Association.
    7. Vandermersch, Mieke & Mathijs, Erik, 2004. "Consumer Willingness To Pay For Domestic Milk," Working Papers 31829, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    8. Lloyd, Tim A. & Morgan, C. Wyn & McCorriston, Steve & Rayner, Anthony J., 2003. "The Impact Of Food Scares On Price Transmission In Inter-Related Markets," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25904, International Association of Agricultural Economists.
    9. Emongor, Rosemary A. & Kirsten, Johann F., 2009. "The impact of South African supermarkets on agricultural development in the SADC: a case study in Zambia, Namibia and Botswana," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 48(1), pages 1-25, March.
    10. Franz Sinabell, 2005. "Marktspannen und Erzeugeranteil an den Ausgaben für Nahrungsmittel," WIFO Studies, WIFO, number 25398, April.

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