Supermarket Power on the High Street
Outline the nature of supermarket power on the high street and beyond
Supermarkets dominate our high street throughout the UK. With this domination there is power, the power to influence and control how and where we shop. The majority of us do our weekly shop in a supermarket; 30 million according to Bevan (2006) cited in (Allen, 2009, p. 74). We use supermarkets because they are convenient, have a good range and are cheap. However, all this comes at a price, we shall see how supermarkets use their market power and buying power to maximize their profits at the expense of local communities and overseas suppliers. We shall also look at how supermarkets make winners and losers in a zero-sum and positive-sum game. Overall, we shall see how the size of the supermarket chains can be used for the abuse of, or even the good of local and overseas communities.
We shall start by looking at the size of supermarkets; Tesco, Asda, Sainsbury’s and Morrisons “The big four” have more than 3900 stores around the UK (Bevan, cited in Allen, 2009, p. 74). This gives them a lot of market power and as they compete with each other for dominance so they impact on local communities. The competition between the supermarkets is felt too by the local independent store, since 2000 Tesco and Sainsbury’s have opened up to 1500 convenience stores on the high street making it difficult for the small independent retailer to make a decent living. As these small independent stores close down, at a rate of 2000 a year (Federation of Small Businesses, cited in Allen, 2009, p.74), this restricts the choice of where to shop. Once the supermarkets have reduced the competition and increased their power over where we shop they can now turn their attention to how we shop. To influence people they use seduction, they entice the customer through the door with special offers and discounts. This is where the supermarkets buying power comes into force, the supermarkets size in relation to their competitor
Supermarkets dominate our high street throughout the UK. With this domination there is power, the power to influence and control how and where we shop. The majority of us do our weekly shop in a supermarket; 30 million according to Bevan (2006) cited in (Allen, 2009, p. 74). We use supermarkets because they are convenient, have a good range and are cheap. However, all this comes at a price, we shall see how supermarkets use their market power and buying power to maximize their profits at the expense of local communities and overseas suppliers. We shall also look at how supermarkets make winners and losers in a zero-sum and positive-sum game. Overall, we shall see how the size of the supermarket chains can be used for the abuse of, or even the good of local and overseas communities.
We shall start by looking at the size of supermarkets; Tesco, Asda, Sainsbury’s and Morrisons “The big four” have more than 3900 stores around the UK (Bevan, cited in Allen, 2009, p. 74). This gives them a lot of market power and as they compete with each other for dominance so they impact on local communities. The competition between the supermarkets is felt too by the local independent store, since 2000 Tesco and Sainsbury’s have opened up to 1500 convenience stores on the high street making it difficult for the small independent retailer to make a decent living. As these small independent stores close down, at a rate of 2000 a year (Federation of Small Businesses, cited in Allen, 2009, p.74), this restricts the choice of where to shop. Once the supermarkets have reduced the competition and increased their power over where we shop they can now turn their attention to how we shop. To influence people they use seduction, they entice the customer through the door with special offers and discounts. This is where the supermarkets buying power comes into force, the supermarkets size in relation to their competitor