Press Releases

Notes for editors
The Rural Shops Alliance (RSA) was formed in April 2001 and now represents over 7,200 independent retail members, employing some 40,700 staff. The RSA – a trade association with a difference – exists to be the campaigning voice of the independent rural retailer and the source for practical support particularly in terms of retail best practice. Many ‘blue chip’ and ‘retail service’ suppliers sponsor and partner the work of the RSA and help the organisation with category management and best retail

COMPETITION COMMISSION REPORT ON GROCERY MARKET – IT’S BUSINESS AS USUAL FOR THE SUPERMARKETS (30/4/08)

The Competition Commission’s long awaited report on the grocery market holds few surprises. There will be few tears in the boardrooms of the “Big 4” supermarket chains - the Commission has decided that what we need for the 21st Century is more supermarkets and to juggle the fascias around a bit. However, whilst the Commission was deliberating, there has been a crucial shift in the way the world works. The rocketing cost of the food on grocery shelves and the £5 per gallon cost of petrol makes its findings very dated already.

Ken Parsons, Chief Executive of the Rural Shops Alliance, commented, “this report was a major opportunity to curb the power of the large supermarket chains and to allow smaller shops to compete on a level playing field. Instead, the Commission is allowing the likes of Tesco to use their raw market power to continue their unfair buying terms. The consequence in the long term will be a lot of local communities facing the closure of their much-valued independent local shop.”

The Competition Commission itself shows the gulf between the prices that the Big 4 obtain and that provided by suppliers to smaller wholesalers and symbol groups – the gap is a massive 16%. (See table 5.1, page 91 of the Report) Clearly part of this difference is down to the economies of larger order sizes, but the Commission then tries to attribute the rest to an unconvincing set of factors, such as larger firms training their buyers better. This really cannot be allowed to pass. It is raw negotiating power, pure and simple. The Commission then proceeds to say that these differences in supplier prices do not significantly affect competition.

These differences do matter. Customers see small shops in both rural and urban locations as having high prices, the owners try to keep prices low at the expense of profitability and hence they under invest in their businesses and end up taking less than the national minimum wage for their own labours. It is an unsustainable model. These shops are very important indeed to those members of the community without cars. They can live with fair competition but not the current situation.

A major opportunity has been missed. Local communities up and down the country will become the poorer when their local shopkeeper finally concedes defeat and closes, not because he is inefficient, but because the Competition Commission has failed to understand the significance of its own figures.

We have a situation where the Big 4 are being allowed their head, there will be an ombudsman to try to protect suppliers; who is there to look after the independent retailer?

ANOTHER SHOT AT AN EASY TARGET …SAYS RSA
Prime Minister Gordon Brown has announced closure orders will be applied to retailers, who sell alcohol to under age people on just two occasions.
The vast majority of independent retailers are highly responsible, trying to follow the letter of the law in often-difficult circumstances. They spend a lot of time and effort training their staff on the law but are now in a situation where a couple of lapses by a junior member of staff can potentially lead to drastic consequences for the owner or manager. Many of our retail members are genuinely frightened of losing their livelihoods through a couple of regrettable lapses by their staff and yet these are the very people who are so often law-abiding pillars of their local community. They are the natural partners of the authorities in trying to reduce underage drinking and to help promote responsible drinking but are being made to feel that it is they who are the criminals. There are only a handful of prosecutions per year for attempting to buy alcohol whilst underage, which is the real crime. Young people can in practice try it on with impunity.

We are already in the ludicrous situation where they can often buy illegal black market drugs far more easily than they can buy duty-paid alcohol, and yet the law continues to devote its resources to crack down even harder on the legitimate shopkeeper, who is easy to monitor and police and will not hit back, rather than face up to what goes on in the streets.

Ken Parsons, Chief Executive of the RSA said, “When a shop on a deprived estate or in a rural village does get closed as a result of these measures, it is not just people’s livelihoods at risk – a vital community resource will also have gone. I only hope that when it does happen, people remember the government’s macho posturing that caused it to happen. We urge the Prime Minister to use the authority of his position to support retailers policy of ‘No ID No Sale’.”

For further information please contact Kenneth Parsons RSA on 07980 673675