Outline the argument supermarket power is a zero -sum game
Outline the argument that supermarket power is a “zero-sum”game
Before we discuss the argument let us understand first what the terms “power” and “zero-sum” mean. Power is a complex term used denote influence, control and domination, (Taylor, et al, 2009,p.59). The power used by supermarkets includes buying and market power. The big four supermarkets in the U.K. account for approximately 75% of the food and groceries market therefore giving them significant market power. Their buying power is the ability they have to negotiate prices with suppliers and the large chains thus being able to demand discounts when buying in such large quantities. This gives them the ability to influence things such as pricing, for example offering goods at below cost prices.
The term zero-sum game is used when one party’s gain will be another’s loss therefore equalling a zero sum. A good example of this is slicing a pie, if one person takes a large slice there is less for everyone else. The pro supermarket campaigners argue that the supermarkets use their power for good and all parties involved benefit to some extent creating a positive sum gain but the the following argues to the contrary..
As shoppers they offer us a wide variety of products at affordable prices, in accessible locations. Additionally they offer employment, boosting local skills and helping to draw in other businesses such as restaurants and retailers to sometimes failing local economies but at what cost to others? Do the low prices mean that somewhere down the supply chain someone else’s profits are being squeezed? Has the out of town retail park been a catalyst in the decline of Britain’s high streets? In 2006 retail commentator Judi Bevan reported that the big four operated around 3900 stores with Tesco alone taking one pound at the tills for every three we spend. Since then they have continued to grow branching out into the corner shop concept and opening an additional 1500 stores in a bid to capture even more
Before we discuss the argument let us understand first what the terms “power” and “zero-sum” mean. Power is a complex term used denote influence, control and domination, (Taylor, et al, 2009,p.59). The power used by supermarkets includes buying and market power. The big four supermarkets in the U.K. account for approximately 75% of the food and groceries market therefore giving them significant market power. Their buying power is the ability they have to negotiate prices with suppliers and the large chains thus being able to demand discounts when buying in such large quantities. This gives them the ability to influence things such as pricing, for example offering goods at below cost prices.
The term zero-sum game is used when one party’s gain will be another’s loss therefore equalling a zero sum. A good example of this is slicing a pie, if one person takes a large slice there is less for everyone else. The pro supermarket campaigners argue that the supermarkets use their power for good and all parties involved benefit to some extent creating a positive sum gain but the the following argues to the contrary..
As shoppers they offer us a wide variety of products at affordable prices, in accessible locations. Additionally they offer employment, boosting local skills and helping to draw in other businesses such as restaurants and retailers to sometimes failing local economies but at what cost to others? Do the low prices mean that somewhere down the supply chain someone else’s profits are being squeezed? Has the out of town retail park been a catalyst in the decline of Britain’s high streets? In 2006 retail commentator Judi Bevan reported that the big four operated around 3900 stores with Tesco alone taking one pound at the tills for every three we spend. Since then they have continued to grow branching out into the corner shop concept and opening an additional 1500 stores in a bid to capture even more