A report by the UK Parliament All-Party Small Shops Group released yesterday called for the creation of an independent retail regulator to stem the power of supermarket giants. The report says supermarkets are driving small shopkeepers to financial ruin. According to Reuters:
The fiercely competitive 120 billion pound grocery market is dominated by four acquisitive companies; Tesco, Asda, part of Wal-Mart, Sainsbury and Wm Morrison.
These companies, along with smaller rivals like Marks & Spencer threaten the livelihoods of those running Britain’s 278,630 small retail outlets.
The small shops report singled out convenience stores, newsagents, off licenses and specialist retailers as most vulnerable to the power of large retailers.
“Evidence from contributors illustrates that large retailers will compete using ‘conventional’ means such as competitive pricing strategies on key footfall generators.”
The report, called “High Street Britain: 2015” said poor performance of a large retailers could be considered anti-competitive if compared with smaller retailers competing in the same catchment area.
In 1999 the Senate held an enquiry into retail matters which touched on similar ground. sadly nothing has come of their report, despite the efforts of committee members such as Senator Andrew Murray of the Australian democrats.
That newsagents have been named in the UK report as among the most vulnerable is no surprise. I’d expect a similar situation here. One only has to look at how Coles and Woolworths have used their might to take the cream of magazines and newspaper business from newsagents. Look at the Vodafone scandal – Vodafone gives Coles 16% commission while newsagents get 5% for the same work. Look at iTunes. Apple did a deal with Coles and cut out newsagents.
The sooner the government gets serious about small business the better for the Australian community.