Investigating the Supermarkets

How glorious this is and how silly of me not to have seen it coming.

So, the allegation is that the supermarkets are doing two things. Firstly, that they\’re oligopolists of a kind, carving up the shopping market between them and there\’s not enough competition. The second is that they\’re driving the smaller retailers out of business….that is, that there\’s too much competition (which is an odd thing to accuse of happening but there we are).

So those fighting either side of that argument (actually, I think the review was demanded by those representing the smaller retailers) ask for someone to go and have a look at the market.

The planning system will also be criticised and is likely to be revamped. The commission will suggest that the "needs test", whereby a new entrant has to prove that a town requires a new supermarket, is a barrier to entry and could be axed. The needs test is unpopular as it hands a big advantage to the incumbent in any town. Abolishing the test would create a level playing field between the big four by making it easier for them to open stores.

However it could prove unpopular with small, independent retailers, who have been put under unprecedented pressure by supermarkets\’ unrelenting expansion.

Aha! There\’s isn\’t enough competition and it isn\’t because of collusion amongst the supermarkets themselves, rather, it\’s the planning system itself. So, loosen that system, allow, even promote, more competition and see the consumers revel in further surplus.

Pity about those small retailers who are going to get steamrollered of course…but then they did ask for the review in the first place.

A little lesson perhaps: if you\’re a lobbying group you might not actually want someone to have an impartial look at you. Might be better just to keep screaming emotionally from the sidelines.