Grocery Report update to focus further on farmers future
The latest evidence gathered so far by the Competition Commission in its on-going investigation into the supply of groceries by retailers in the UK has been revealed today.
The document, entitled Emerging Thinking, summarises the current CC thinking on areas such as the supply chain, planning and land banks and identifies areas where additional evidence is sought.
It also reveals that local markets across the UK will be the main focus for the next stages of the CC's investigation.
The report states that since 2000, grocery sales have increased by nearly 17% in real terms to an estimated total of £123.5bn, while at the same time the real price of food has declined by around 7%.
"This growth in sales has been seen at both supermarkets (26%) and convenience stores (19%). However, sales at specialist grocery stores, such as butchers and greengrocers, have only increased by 1% in real terms over this period," the report states.
While grocery sales have increased, the number of grocery outlets has declined, with the number of supermarkets, convenience stores and specialist grocery stores falling by 2%, 8% and 7% respectively since 2000.
The report states that the number of stores operated by the four largest grocery retailers (Asda, Morrisons, Sainsbury's and Tesco) has more than doubled since 2000 reflecting both the opening of new stores and the acquisition of competitors.
Peter Freeman, chairman of the CC and Inquiry Group chairman, said the CC had considered the evidence supplied concerning relationships between grocery retailers and their suppliers.
The focus in the CC's assessment of primary producers has been primarily on dairy and pig meat, as these were the two sectors where most concern was raised.
In the summary document the CC said: "The number of dairy and pig meat farmers has declined in recent years indicating significant difficulties in those sectors.
"Average incomes are now rising but supermarkets are retaining an increasing share of the retail price for milk (the situation is leass clear in pig meat).
"We will be looking at this further as well as other primary produce sectors."
The next stages of the investigation and the issues to be looked at before the provisional findings are published in June 2007, are also outlined in the document. The document is accompanied by eight working papers and a survey of suppliers.
Freeman said: "Our principal concern now is to focus on competition between retailers at the local level, where it most matters to consumers, as this is where many of the potential concerns we have would be evident.
"We have now gathered a large amount of evidence about the overall picture in this market, and having gathered this information, we can now look in detail at the situation locally."
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