Government action is needed to control the power of the big grocers, consumers believe

UK consumers believe Government intervention is needed to ensure that big grocers such as Tesco act in the public interest, exclusive research for Retail Week has revealed.

 

Four out of five people believe rules and regulations should be imposed. Some 48 per cent think Tesco specifically is getting ‘too big and powerful’, verses 46 per cent who disagreed.

 

The findings come amid increasing concern in some quarters about the scale of Tesco’s success. The giant grocer has a 29 per cent market share in the UK and is poised to rack up profits of£2 billion for the first time this year.

 

However, some industry observers believe the group - the UK’s brightest retail star - may face a backlash of the sort experienced by Wal-Mart in the US and elsewhere. Lobbying groups such as the Association of Convenience Stores have waged a rearguard action against Tesco’s recent drive into the convenience market.

 

Steve Parker, director of ICM, which conducted the survey, said: ‘There is a strong sense of public feeling that the Government needs to act, and the supermarkets should not ignore this. There is no doubt that there is consumer concern.

 

‘While things are great for Tesco at the moment, further down the road it could change. The message is: ‘Tesco beware’.’

 

In response to the survey, a Tesco spokesman said: ‘There are already rules governing how supermarkets operate. They cover planning, supplier relationships and competition. The industry has been subject to two detailed competition inquiries in the past five years, both of which have concluded that we operate competitively and to the benefit of consumers.’

 

The OFT is still conducting its audit of the big grocers’ adherence to a code of conduct governing their relationship with suppliers. It is expected to report its findings to the DTI within the next few months.

 

Reaction to our story

 

‘You only have to look at the mixed performance of retailers over Christmas, where there were winners and losers - both big and small - to see how size does not necessarily determine success. Customers care most about their shopping trip and will vote quickly with their feet if they do not get what they want. ‘

 

Tesco

 

‘This [survey] backs up what we’ve been saying for some time, which is the public don’t want supermarkets to have unfettered power.’

 

Association of Convenience Stores

 

‘There is no point in attacking Tesco. They are doing what they should do and getting results for shareholders. What we need to do is ask the Government what they want the retail landscape to look like in the future.’

 

Jerry Marwood

 

Managing director, Spar

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