Big four are the winners of grocery inquiry

Wednesday was a good day for the big four grocers, even Tesco, which had the most to lose. In very large part, the report found that the grocery market works in the interests of consumers, suppliers are treated fairly and there is no tacit co-ordination on pricing.
Remarkably, after all the lobbying and agitation, the report came up with the totally unexpected finding that a lack of competition in certain local markets could be solved by the development of more edge-of-town supermarkets.

So a report that had instilled fear in the big four could actually represent a positive opportunity. Not what the convenience sector will have been hoping for and bad news too for specialist non-food retailers.

Reform of the planning system is at the heart of what the Commission is proposing. But implementing the plans will be easier said than done. Introducing a competition test into the planning process and requiring retailers to sell parts of their landbanks will be hard policies to put into effect and lead to lengthy legal wrangles.

Many of the issues that the Commission has identified would be better solved by a planning system that works efficiently and deals with applications in a timely and logical fashion. That way, retailers could either develop their landbanks or sell sites they don’t want.

But as it stands, the chance of any retailer being forced to sell a site from its landbank to a competitor looks highly unlikely. Even Commission chairman Peter Freeman admitted it would be the “last resort”.

While it is right and good that retailers have been vindicated, we must not forget the huge amount of time and money that has gone into this inquiry. Successive probes have found that UK shoppers benefit from a vibrant, competitive retail economy. The competition authorities now owe the big retailers a decade of peace from more intrusive and unnecessary inquiries.