Supermarket Expansion.

Very weird statement here:

An influential group of 80 MPs will this week call for an independent
retail regulator, with far broader powers than the Office of Fair
Trading, to be set up to curb the unchecked growth of the UK’s largest
store groups.

Unchecked expansion? What are these people smoking? The Morrissons/Safeway bid went to the Competition Commission, didn’t it? It takes years for the supermarkets to get planning permission for a new store, if they can get it at all. It might be possible to make the case for "not enough regulation" but not for none which is what "unchecked" means.

New research by the Association of Convenience Stores
(ACS) shows that Tesco’s 500-store One Stop convenience chain charges
20 per cent more for goods than Tesco Express. One Stop’s prices are
over 25 per cent higher than those in Tesco’s larger stores, the ACS
says.

The association claims that higher prices in
One Stop contradict both Tesco’s assertion that it passes lower prices
onto customers and the OFT’s argument that grocery sector consolidation
benefits consumers. Tesco acquired One Stop in 2002 as part of its
controversial purchase of T&S Stores, a convenience chain.

So bleedin’ what? That a company slices and dices its market is hardly news now is it? Product differentiation and all that. A small store is likely to cost more to run per unit of sales than a large one…otherwise, why do you think all those shopping barns have been built? Yer milk is more expensive in that store on the corner isn’t it? Whether owned by Tesco or not?

This is nonsense, simply special pleading by the Association of Convenience Stores. The sadness is that there are 80 MPs stupid enough to listen to this tosh.

2 responses

  1. The Remittance Man Avatar
    The Remittance Man

    Errrrr? Maybe this engineer’s a bit stupid, but I thought shops charge what they think the market will bear with an aim to maximise profit.
    Obviously Tescos have sussed that they can get away with higher charges at their convenience stores, because they are ….. wait for it ….. convenient.
    When will our dimwitted rpresentatives learn that what keeps prices down isn’t regulation, but competition. There’s only four words to learn, it can’t be that hard; all MP’s, repeat after me: “Regulation drives prices up”.
    RM

  2. Rub-a-dub Avatar
    Rub-a-dub

    Can’t they see that this is what will save the convenience store?
    I used to work for OneStop a couple of years ago. They are noe owned, but otherwise independent from Tesco. As part of the sale agreement, some of the stores are being converted into Tesco Express stores. I believe this is now the origin of most of the Tesco Express stores.
    So let me get this straight. Tesco are using their resources to convert their stores into ones selling the same goods for less. And the problem?

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