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Last Updated: Feb 18th, 2008 - 14:39:01 |
LONDON (Reuters) - Small, independent shops are in danger of disappearing from the country's high streets because of increasing competitive pressure from the large supermarket chains, a group of MPs said on Wednesday.
A report by the All-Party Small Shops Group called for the creation of an independent retail regulator to stem the power of supermarket giants which it believes are driving small shopkeepers to financial ruin.
The group said there was concern that many local shops will have ceased trading by 2015.
The fiercely competitive 120 billion pound grocery market was 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 catchmaent area.
As well as calling for a retail regulator, the report said Britain needed to implement a moratorium on further mergers and acquisitions until the government had brought forward plans to secure the "diversity and vitality" of the retail sector.
Other measures included giving more decision-making power to people locally, reviewing the tax system and getting local authorities to adopt a retail strategy within development plans.
REPORT REJECTED
Tesco said it rejected the view small shops were in decline.
"People use both supermarkets and small shops at different times, and as the report acknowledges, the retail market is fiercely competitive," Tesco's Lucy Neville-Rolfe said.
"My conclusion is that the consumer is the best regulator and there is room in a thriving market for anyone who satisfies customers," she added.
The report was also criticised by the British Retail Consortium, which said the group had not recognised how major retailers were giving consumers what they wanted.
"The committee is trying to turn the clock back and reverse some well established trends in consumer shopping habits," said BRC Director General Kevin Hawkins.
"Supermarkets and other large multiple retailers have grown and become the dominant form of shopping because they have met the changing needs of their customers. Consumers have clearly voted with their feet," he added.
The BRC said small retailers succeed in such highly competitive markets by offering consumers something different and better that is targeted at particular areas of the market.
The report comes just three weeks before the Office of Fair Trading (OFT) rules whether to refer the grocery sector to the Competition Commission.
OFT Chairman Philip Collins and Chief Executive John Fingleton told Reuters on Tuesday that the watchdog would study the all-party report's findings prior to its commission ruling.
"It is possible that somebody has gone and given particular evidence to the small shops group that they haven't told us about that we think is relevant. If so we'd put that into consideration and even contact them to validate it," he said.
"But I think that a lot of the information base we have may be more thorough because of our investigative powers."
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