Overall, consumers in the UK receive a good deal from retailers.

The UK Competition Commission (CC) has published its provisional findings into the country’s groceries market, and has concluded that overall the consumer is receiving a good deal from retailers.

The findings, however, state that action is needed to improve competition further and that the relationships between retailers and their suppliers need to be addressed.

One example identified by the CC as a constraint to competition is that around 10% of all larger grocery stores control a nearby landsite, which can restrict a competitor’s growth and entry to the market.

Peter Freeman, Chairman of the CC and Inquiry Group Chairman, said: “Having looked in detail at local grocery markets, in most areas shoppers have a good choice and benefit from the strong competition between retailers, but in a number of local areas more competition would benefit consumers both locally and more generally.

“We are concerned that retailers could be using existing land holdings and restrictive covenants to frustrate potential competition. Further, whilst we understand that the planning system has to balance conflicting demands, not all of which favour development, it can act as a barrier to new competing stores.”

The CC also looked into the role of smaller, independent shops and concluded that any store that provides consumers with a strong retail offer will prosper – and found no evidence of unfair competition between small shops and larger retailers.

For further details of the CC’s preliminary findings, log on to www.competition-commission.org.uk ^[1]. The final report will be published in May 2008.