Supermarkets 'Could Perform Better'

Supermarkets are "delivering a good deal for consumers", but further action needs to be taken to improve competition in certain areas and to improve relationships with suppliers.

The findings come from a provisional report published by the Competition Commission.

The report found that a lack of competition in certain local markets disadvantaged consumers and allowed retailers to weaken their offer to consumers nationally.

It also criticised supermarkets for using restrictive covenants when selling land, which makes if less likely that rival shops can be built there as well as buying up huge swathes of land, which prevents competitors from buying or building a premises near an existing business.

The CC also expressed concern about the ability of retailers to transfer excessive risk and costs to suppliers through various purchasing practices such as retrospective changes to supply agreements.

The CC will now consider a range of measures to address these concerns before deciding on its final remedies. Options under consideration include the lifting of restrictive covenants and exclusivity arrangements, sales of land holdings, and recommending changes to the planning system to place greater weight on competition and choice.

The CC will also consider changes to the Supermarkets Code of Practice, which regulates retailer-supplier relationships.


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