Is here a problem with competition between the supermarket chains? Why, yes, there is.
And what is the cause of that problem?
The planning regime (in particular, PPS6 in England, SPP8 in Scotland, PPS5 in Northern Ireland and MIPPS 02/2005 in Wales), and the manner in which the planning regime is applied by Local Planning Authorities, acts as a barrier to entry or expansion in a significant number of local markets: (i) by limiting construction of new larger grocery stores on out-of-centre or edge-of-centre sites; and (ii) by imposing costs and risks on smaller retailers and entrants without pre-existing grocery retail operations in the UK that are not borne to the same extent by existing national-level grocery retailers. (c) The control of land in highly-concentrated local markets by incumbent retailers acts as a barrier to entry, by limiting entrants’ access to potential sites for new larger grocery stores.
c) is of course the result of the supermarkets gaming the current planning system. Elsewhere they note that the vast majority of the "landbank" sites are not being used to control access to the market. This is something that I\’ve been saying for some time now: given the time it takes to get planning permission it would be logical for the chains to have sites that they were in the process of developing. They identify 886 sites in the landbanks and almost all of these (all except 110) are indeed in the normal process of development.
Essentially, although they don\’t say this explicitly, if you want to have more competition in retailing, you\’ve got to actually allow more competition in retailing: the planning system has to allow competitors to open stores.
Against this background, our investigation has sought to establish whether UK grocery retailing is competitive, as that seems to us to offer the best guarantee that consumers will be able to exercise their own judgement as to what grocery retail offer they prefer. If consumer preferences change, retailers in a competitive market must alter their offering or lose customers, market share and profit. We prefer, therefore, to seek, so far as possible, to empower the consumer rather than to impose on the consumer our own judgement of what the grocery retailing offer should be.
Quite. You don\’t like what\’s on offer? Spend your money elsewhere. Nice to see good sense breaking out, eh?
Ah, I\’d missed this lot.
Andrew Simms, at the think tank New Economics Foundation and the author of Tescopoly, said: "Some of the Competition Commission’s proposals come straight out of Alice in Wonderland. They are so perverse that, instead of doing the job they were given, which was to break the stranglehold of the big four supermarkets over British shoppers and producers, they propose measures that will tighten their grip."
Cretin. The Competition Commission first found out that there was no such stranglehold. It\’s still a comptetive market. Second, they found that the limitation on competition was the ability of people to open stores and that, where this was not possible perhaps the planning system should be changed (they muse on this rather than baldly state it) to enable further competition.
Clive Davenport, at the Federation of Small Businesses, said: "The Competition Commission has consistently failed to be an effective regulator to the retail industry. Three time-consuming, costly and ultimately meaningless inquiries in just seven years tell their own story."
Moron. Three enquiries in seven years have found that there is no monopoly or oligopoly that is exploiting the consumer. Thus they are being an effective regulator.