Following the release of a report by the Conservatives which warned the majority of independent shops could disappear by 2015, a business lobby group has looked to the government to bring in more preventative measures.
The Forum of Private Business (FPB) said the government must do more to halt the decline of small shops, which the Conservatives say is down to large retailers with greater buying power undercutting small shop owners.
The Competition Commission (CC), which is due to publish the final results of its own investigation into inequalities in the groceries market this month, found that since 2000, sales in supermarkets have grown by more than a quarter, compared to less than 20% in convenience shops and just 1% in specialist stores.
The CC has also called into question some of the business practices of supermarkets, such as below-cost pricing, where large retailers significantly undercut market prices on the high street by selling certain products at a loss in order to soak up trade, making up the losses on other product lines.
FPB chief executive Phil Orford said the findings add ‘even more’ weight to the argument that the government must do more to support smaller retailers.
“Increasing competition between rival supermarket chains in order to drive down prices for consumers is far from protecting smaller shops on the high street, many of which genuinely fear for their survival.”
© Crimson Business Ltd. 2008
