Competition in the UK Grocery Trades

  • Christopher Moir

Abstract

In March 1988 the Today newspaper carried the story that the five largest grocery chains had colluded over the retail price of baked beans. It raised the issue of possible use of monopoly power in retailing. The alleged collusion followed an investigation by a trade newspaper representing smaller business. The Independent Grocer (25 March 1988), reported that a tin of Heinz 450g baked beans was priced at 25 pence in stores belonging to the five leading grocery multiples. This, the newspaper stated, was 4 pence more than the price charged two months earlier, a rise of 20 per cent. The increase in the retail price could not be attributed to an increase in the price charged by the supplier. There was no cost-induced need to put the price up; retailers margins were not being squeezed.

Keywords

Sugar Income Marketing Assure Expense 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. J.S. Bain (1956), Barriers to New Competition (Cambridge, Mass.: Harvard University Press).CrossRefGoogle Scholar
  2. W.J. Baumol (1982), with J.C. Panzar and R.D. Willig, Contestable Markets and the Theory of Industry Structure (San Diego: Harcourt Brace Jovanovitch).Google Scholar
  3. British Business (1988), 2 December 1988, Department of Trade and Industry (London).Google Scholar
  4. CSO (1988), United Kingdom National Accounts, 1988 ed. (London: HMSO).Google Scholar
  5. E.H. Chamberlain (1933), The Theory of Monopolistic Competition (Cambridge, Mass: Harvard University Press).Google Scholar
  6. A.K. Dixit and J.E. Stiglitz (1977), ‘Monopolistic Competition and Optimum Product Diversity’, American Economic Review, Vol. 67, no 3, 297–308.Google Scholar
  7. EDC 1988, The Future of the High Street, Distributive Trades EDC (London: HMSO and NEDO).Google Scholar
  8. F.J.W. Friedman and A.C. Hoggart (1980), An Experiment in Non-Cooperative Oligopoly (Greenwich, Connecticut JAI Press).Google Scholar
  9. P.G. Ghemewat and R.E. Caves (1986), ‘Capital Commitment and Profitability: an Empirical Investigation’, Oxford Economic Papers, New Series 38, supplement, 94–110.Google Scholar
  10. A. Goldman (1977), ‘Consumer Knowledge of Food Prices as an Indicator of Shopping Effectiveness’, Journal of Marketing, Vol. 41, no. 14, 67–75.CrossRefGoogle Scholar
  11. M. Hall (1949), Distributive Trading (London: Hutchinson).Google Scholar
  12. W.H. Heller (1974), ‘What Shoppers Know — Don’t Know — about Prices’, Progressive Grocer, Vol. 52, no. 11, 39–41.Google Scholar
  13. IFS (1984), ‘The Regulation of Retail Trading Hours in Respect of the Committee of Inquiry into Proposals to Amend the Shops Acts’. Appendix 6 (London: HMSO Cmnd 9376).Google Scholar
  14. IGD (1988), Food Retailing Review (Watford: Institute of Grocery Distribution).Google Scholar
  15. Merger Guidelines (1982) (Washington: US Department of Justice).Google Scholar
  16. P.J. McGoldrick (1987), ‘A Multi-dimensional Framework for Retail Pricing’, International Journal of Retailing Vol. 2, no. 2, 3–26.Google Scholar
  17. MMC (1981), Discounts to Retailers, Monopolies and Mergers Commission report (London: HMSO HC311).Google Scholar
  18. NEDO (1979), A Structural Model of British Retail Trade (London: NEDO).Google Scholar
  19. B. Nooteboom (1985), ‘A mark-up model of retail margins’, Applied Economics, Vol. 17, 647–67.CrossRefGoogle Scholar
  20. H. Nystrom (1970), Retail Pricing: An Integrated Economic and Psychological Approach (The Economic Research Institute at the Stockholm School of Economics).Google Scholar
  21. OFT (1985), Competition and Retailing (London: Office of Fair Trading).Google Scholar
  22. N. Penny (1987), ‘Information Requirements of a Major Retailer’ in Access to Retail Information (London: British Library).Google Scholar
  23. C. Pratten (1987), A Survey of the Economies of Scale (Brussels: European Commission).Google Scholar
  24. Retail Inquiry (1978, 1979, 1980), Retailing, Business Monitor SDA, and SDO 25 (London: HMSO).Google Scholar
  25. J. Robinson (1933), The Economics of Imperfect Competition (Cambridge, Cambridge University Press).Google Scholar
  26. A. Shaked and J. Sutton (1982), ‘Relaxing Price Competition through Product Differentiation’, Review of Economic Studies Vol. 49, no. 1, 3–14.CrossRefGoogle Scholar
  27. L.P. Simkin, P. Doyle and J. Saunders (1988?), The Development of a Store Location Assessment Model (Department of Marketing, University of Warwick).Google Scholar

Copyright information

© Christopher Moir and John Dawson 1990

Authors and Affiliations

  • Christopher Moir

There are no affiliations available

Personalised recommendations