Outline the Argument that Supermarket Power is a ‘Zero-Sum’Game.

Topics: Asda, Wal-Mart, Grocery store Pages: 5 (1201 words) Published: June 8, 2014
Outline the Argument that Supermarket Power is a ‘Zero-Sum’Game.

Over the past few decades, hundreds of supermarkets have been built in towns and cities across the UK. They have become such a powerful force, that the four largest supermarkets, (Tesco, Sainsburys, Asda and Morrisons, ) take nearly three out of every four pounds spent on groceries, in the UK. (Bevan 2006). They have a combined market share of over 73.6% of the UK grocery market. (www.wikipedia.org “List of supermarket chains in the UK”).

What is a ‘Zero-Sum’ Game?

American born , Sociologist, Dennis Wrong (1997) stated that the power held by the supermarkets is a ‘zero-sum’ game. This means that they are in a situation whereby one party’s loss is another party’s gain and vice versa. If you subtract the total losses from the total gains, the sum would equal zero. (Taylor et al., 2012, p.70)

For example, when a new supermarket opens up in a town, which is currently predominantly supplied by local stores, the supermarket will most probably take a significant proportion of their customers from them, due to their lower prices and promotions. This means that the supermarkets gain, by increasing sales and the local shops will lose out. Therefore, for example, total gains of the supermarket would be +1, as they have gained new custom, and the loss of the local shop is -1 as they have lost out. +1 subtract -1 equals 0.

“In economic theory, a zero-sum game is a mathematical representation of a situation in which a participant's gain (or loss) of utility is exactly balanced by the losses (or gains) of the utility of the other participant(s). If the total gains of the participants are added up, and the total losses are subtracted, they will sum to zero.” (http://en.wikipedia.org/wiki/Zero-sum_game)

The opposite side of this theory, is that there is a ‘positive-sum’ game. This is a situation in which everyone is said to benefit . An example of this would be, again, a new supermarket opens in a town, it attracts a lot of custom , possibly from further afield, this in turn attracts more merchants, including cafes, bars etc, and, in turn, regenerates an area, that could have been in need, as well as creating employment opportunities for local people. (Taylor et al., 2012, p.70)

Is Supermarket Power a ‘Zero-Sum’ Game?

There are a group of lobbyists in Patrick, Glasgow, who are members of a group called STOP (Stop Tesco Owning Patrick).

Members of STOP, and another local anti-supermarket group, named All Tomorrow’s Patricks, are opposed to the proposal of Tesco building on a 10,000 square meter brown field site. They feel that should this proposal be allowed to go ahead, that it will be damaging for their local economy, by causing local butchers, green grocers and florists to close down, as their customers move to attend the Tesco store, where they will be able to find cheaper products, more variety and larger promotions. (Taylor et al., 2012, p.62)

This would be a loss to the local business people of Patrick, and a gain to Tesco, as their customer base increases, resulting in higher profits and sales. A zero-sum game.

Anti-supermarket campaign groups, such as STOP and All Tomorrow’s Patrick’s, feel that the sheer magnitude of the supermarkets buying power has given them a huge advantage over the food and clothing supply chains. Where supermarkets may provide good value for money for their customers, they do so at the expense of the suppliers, and therefore the suppliers staff, both in the...
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