UK: Competition to thrive in grocery sector - study
The UK grocery market is "more competitive than ever", according to a study published today (30 October).
The report, published by retail analysts Verdict Consulting, comes ahead of the publication of a UK government investigation into the sector.
The UK's Competition Commission is set to publish its findings tomorrow amid claims that a supermarket watchdog will be created to police the sector and ensure the big four retailers do not abuse their power.
Verdict Consulting claims competition between the big four - Tesco, Asda, Sainsbury's and Morrisons - will only intensify in the next five years to encourage "fickle" consumers to shop at their stores more often.
"There is a common belief that because food retail has a number of very large, dominant players consumer choice is somehow stifled," said Verdict director of consulting, Neil Saunders. "In truth, it isn't - the biggest battle grocery retailers face is how to hold onto increasingly fickle customers who are able to transfer their custom elsewhere."
Despite claims that some towns in the UK have become so-called "Tesco Towns", Verdict argued that all of the "big four" are stronger than in recent years. "Sainsbury and Morrisons were both much weaker than they are today. Both were focused on sorting out internal issues rather than on actively growing their market share," the report said. "That has now changed: both retailers are fully focused on trying to attract new customers and that, ultimately, means a much more competitive environment."
The researchers also claimed that with growing consumer interest in the "ethical" consumption will fuel the growth of "alternative players" like farmers markets and food box delivery schemes.
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