1. Have supermarkets become too big to the extent that they are damaging competition?
The growth of supermarkets does however have some benefits for competition. Firstly, due to the uniformity of products, prices are easily comparable across stores for consumers. This means they can compare pricing strategies of different supermarkets and see which has the most competitive pricing, therefore get the best deal available to them, increasing competition and allowing consumers to make a more informed choice when buying. Prices of commodities do not fluctuate a lot because of this, as competitors must maintain constant prices, therefore consumers do not have to worry about the price of necessary items changing suddenly. Global commodity prices are therefore determined by the market, rather than by the retailers such as the large supermarkets. For example the number of dairy farms in Britain fell by more than 40% between 1995 and 2005, but it is clear that supermarkets are not to blame for this as the price of milk is set mainly by demand and as a result of this, the remaining farms incomes and herd sizes have increased as well as their profitability improving greatly.
Supermarkets today use online selling methods to reach a wider market, also increasing competition which is possible due to their size as well. Selling via the internet improves the quality of service a consumer receives from a company, especially as they are competing for business with rival supermarkets. Online selling also makes shopping easier for consumers, benefiting competition. This competition means supermarkets are constantly motivated to stay innovative and provide a good service, as to ensure they do not lose customers to rival companies. The large supermarkets are consequently able to offer more efficient services to consumers in response to needs they have identified while trying to be competitive. For example offering prepared vegetables, this saves busy consumer’s time and in turn makes them become more appealing.
Alongside this, as supermarkets operate on such a large
Supermarkets today use online selling methods to reach a wider market, also increasing competition which is possible due to their size as well. Selling via the internet improves the quality of service a consumer receives from a company, especially as they are competing for business with rival supermarkets. Online selling also makes shopping easier for consumers, benefiting competition. This competition means supermarkets are constantly motivated to stay innovative and provide a good service, as to ensure they do not lose customers to rival companies. The large supermarkets are consequently able to offer more efficient services to consumers in response to needs they have identified while trying to be competitive. For example offering prepared vegetables, this saves busy consumer’s time and in turn makes them become more appealing.
Alongside this, as supermarkets operate on such a large