Supermarket sector more competitive than ever

Source: Retail Digital

Date :31/10/2007 09:08:30

The grocery market is one of the most competitive in British retail according to a new report published before the release of the Competition Commission’s preliminary findings into the sector.

The study by Verdict Research showed that far from suffering from a lack of competition, the grocery sector and the players within it face an increasingly hard battle to win over customers.

All of the big four supermarket players, Tesco, Sainsbury’s, Asda and Morrisons, share more than eight out of ten of their regular customers with other food stores.

As a result it is virtually impossible for any one player to form a monopoly with no one chain having an exclusive hold over customers, Verdict said.

Looking ahead

The report predicts that competition between supermarkets will intensify over the next five years as the leading retailers battle to secure their share of consumer spend.

The report argued that “over the past five years, customer sharing numbers remain virtually unchanged, showing that customer choice has not been diluted and that people are still able to shop around.”

“There is a common belief that because food retail has a number of very large, dominant players consumer choice is somehow stifled,” said Neil Saunders, consulting director at Verdict.

“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.”

Verdict also argues that the growing interest in ethical and local produce will help fuel the growth of alternative players such as farmers' markets and food box delivery schemes.

October 31 2007