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Grocery Retailers and Regional Monopolies

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  • Rachel Poole
  • Graham Clarke
  • David Clarke
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    Abstract

    The recent Competition Commission inquiry into supermarket retailing highlighted the existence of spatial monopolies in certain areas of the UK. This paper explores their extent and examines future retail expansion opportunities in light of the report's recommendations. Using a number of indicators, we assess the geographical incidence of monopolies and provide a series of 'what-if?' analyses of how retailers might achieve growth. We examine how further market concentration might exacerbate existing monopolies/duopolies and consider the store divestments retailers may be prepared to undertake to increase their market shares. The overall pattern of retail provision in the British market is found to be highly complex at the subnational level. The indicators examined highlight monopoly/duopoly situations in under-provided areas, particularly relating to Tesco and Sainsbury in South East England. We suggest that merger/acquisition amongst the top firms might provide opportunities for other retailers to enhance market share in current areas of weakness. La recente Commission sur la concurrence qui a mene une enquete sur le ventes au detail des supermarches a souligne la presence de monopoles spatiaux dans certaines zones du Royaume-Uni. Cet article cherche a etudier leur portee et examine les possibilites de developpement futures, compte tenu des recommandations du rapport. Employant un nombre d'indicateurs, on evalue la frequence des monopoles et fournit des analyses hypothethiques de la facon dont les detaillants pourraient realiser la croissance. On examine comment une autre concentration du marche pourrait aggraver les monopoles/duopoles existants et considere les cessions de magasins necessaires afin d'augmenter leur part du marche. Sur le plan regional, la distribution globale du commerce de detail en Grande-Bretagne s'avere tres complexe. Les indicateurs examines soulignent des situations de monopole/duopole dans des zones defavorisees, en particulier quant a Tesco et Sainsbury dans le sud-est d'Angleterre. On laisse supposer que des fusions/rachats des premieres entreprises pourraient permettre a d'autres detaillants d'accroitre leur part du marche dans des domaines qui s'annoncent mal a l'heure qu'il est. Eine kurzlich von der Wettbewerbskomission durchgefuhrte Untersuchung des Einzelhandels in Supermarkten hob das Vorhandensein raumlicher Monopole in gewissen Gebieten des Vereinigten Konigreichs hervor. Dieser Aufsatz untersucht ihr Ausmass, und pruft zukunftige Moglichkeiten der Ausweitung des Einzelhandels im Lichte der Empfehlungen des Gutachtens. Mit Hilfe einer Anzahl von Indikatoren beurteilen die Autoren die geographische Verteilung des Auftretens von Monopolen, und erstellen eine Reihe von 'was, wenn' Analysen, wie Einzelhandler Wachstum erzielen konnten. Sie untersuchen, inwiefern zunehmende Konzentration des Marktes bereits bestehende Monopole/Duopole verscharfen konnten, und uberlegen, ob Einzelhandler Laden aufgeben wurden, um ihren Marktanteil zu vergrossern. Das Gesamtbild der Versorgung des britischen Marktes mit Einzelhandlern erweist sich auf der der Landesebene untergeordneten Stufe als ausserst komplex. Die uberpruften Indikatoren beleuchten monopolistisch/duopolistische Situationen in nur massig versorgten Gebieten, mit besonderem Hinweis auf Tesco und Sainsbury in Sudostengland. Sie legen nahe, dass Zusammenlegung, bz.w. Ubernahme unter Spitzenfirmen fur andere Einzelhandler Gelegenheiten darstellen konnten, ihren Marktanteil in Gebieten zu steigern, die gegenwartig Schwachen aufzeigen.

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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Regional Studies.

    Volume (Year): 36 (2002)
    Issue (Month): 6 ()
    Pages: 643-659

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    Handle: RePEc:taf:regstd:v:36:y:2002:i:6:p:643-659

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    Related research

    Keywords: Grocery Retailing; Competition Commission; Spatial Monopolies; Merger Scenarios; Store Divestments;

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    1. Neil Wrigley, 2001. "Local spatial monopoly and competition regulation: reflections on recent UK and US rulings," Environment and Planning A, Pion Ltd, London, vol. 33(2), pages 189-194, February.
    2. Lamm, R McFall, 1981. "Prices and Concentration in the Food Retailing Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 30(1), pages 67-78, September.
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