The report states that no supermarket chain has an exclusive hold over customers and all the big four supermarket players share more than eight out of ten of their regular customers with other food stores.
Customers actively exercise their choice about where to shop for groceries, compared with other retail sectors. The average food consumer makes regular use of three stores, while in the majority of retail sectors the average number of stores regularly used is just two.
“There is a common belief that because food retail has a number of very large, dominant players consumer choice is somehow stifled,” according to Verdict director of consulting Neil Saunders. “In truth, it isn’t – the biggest battle grocery retailers face is how to hold on to increasingly fickle customers who are able to transfer their custom elsewhere.”
The report said that the battle for customers will intensify over the next five years. It stated that mobile shoppers use stores while travelling, for example, to and from work. It also points out the continued growth in internet shopping is giving shoppers greater access to food retailers that may not have a store in their locality.
“People seem to be increasingly worried that Tesco, as the leading player, could attain a monopoly position in the market, but the hard facts behind the contention just don’t stack up,” said Saunders. “Tesco may have the largest market share, but it certainly doesn’t have a monopoly on customers and there is virtually nothing it can do to compel people to shop with them.”
The Competition Commission will release its preliminary findings into the grocery sector tomorrow.
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