The supermarket sector

News


House price latest

House prices up by 6.9%.

Read more
Model agencies collude to fix rates

Regulators find leading model agencies guilty of price fixing.

Read more

Supermarkets

Increasing concentration

There is clear evidence that the UK grocery supermarket sector is increasingly dominated by a few firms, led by Tesco, Sainsbury and ASDA. The supermarket sector is oligopolistic and the pricing strategy of supermarkets can be understood using game theory approach.

It is also accepted that many farmers and growers are suffering as a result of the increasing monopsony power of the major supermarkets.

The pace of concentration accelerated until 2012, but, since then, the emergence of the low-cost retailers Aldi and Lidl has halted the rise of the big four, and reduced the 4-firm concentration ratio to 72.3% (down from 75% in 2011).

 (Sources: statista - 2014 and The Guardian

Supermarket market shares | amCharts

Tesco was prevented by the OFT from purchasing Safeway in 2002, but was allowed to buy 1200 convenience stores. By 2015, Tesco had acquired around 2000 convenience stores.

Update: Tesco buys grocery wholesaler, Booker

In a further development in the long march of Tesco towards supermarket dominance, it has purchased Booker, the grocery wholesaler, for £3.7bn.

More on 'Tesco buys Booker'

The decline of independent retailers

The rise of the large supermarket chains has, unsurprisingly, coincided with the decline in independent high street retailers.

Over the last 10 years the number of independent retailers has fallen by a half, from 35,000 to 18,500.*

*Source:  IGD Research and William Reed Business Media, 2015

See also:

Oligopoly

Regulation

Model agency price fixing


Alternative finance

Report on the growth of alternative finance.

Read more
GDP latest

UK grows by 0.3% in 1st quarter of 2017.

Read more
Customs unions

Costs and benefits of customs unions.

Read more
New materials

Multiple choice papers for Paper Three.

Read more
Brexit update

Article 50

What trading options are available to the UK?

Savings ratio

Savings ratio falls to lowest level on record.

Read more
Tax avoidance

Double Irish - and a Dutch Sandwich more..

The OECD presents its final package for reform of international tax rules..more

OECD - reducing income inequality will boost growth..more