In London, the Times reports that the three major supermarket chains not named Tesco are ganging up on the UK’s dominant retailer as a way of slowing down its continued market share growth.
According to the story, Sainsbury, Wal-Mart-owned Asda and William Morrison Supermarkets are all preparing to submit responses to a report released by the government Competition Commission two months ago. That preliminary report said that there were 110 sites described as “landbanked,” or stockpiled by various retailers in order to block competitors from getting a foothold in certain markets. Tesco is believed to control about half the sites being criticized by the commission, though the other retailers could be vulnerable to sanctions imposed by the government.
The Times story says that while all three retailers agree on their opposition to Tesco, they differ on what the government should do. Asda, for example, is said to favor planning regulations that would give preferential treatment to retailers that don’t have stores in new markets, and that it could support moves to force Tesco to sell off some landbanked properties and perhaps even some stores. Sainsbury is said to favor a less radical approach, in part because it does not want to become the victim of remedies that it recommends.
Not surprisingly, the Times writes, “Tesco is expected to insist there is no need for tough remedies because the grocery sector is already extremely competitive. It will fiercely oppose the introduction of a competition test or store and land sales.”
According to the story, Sainsbury, Wal-Mart-owned Asda and William Morrison Supermarkets are all preparing to submit responses to a report released by the government Competition Commission two months ago. That preliminary report said that there were 110 sites described as “landbanked,” or stockpiled by various retailers in order to block competitors from getting a foothold in certain markets. Tesco is believed to control about half the sites being criticized by the commission, though the other retailers could be vulnerable to sanctions imposed by the government.
The Times story says that while all three retailers agree on their opposition to Tesco, they differ on what the government should do. Asda, for example, is said to favor planning regulations that would give preferential treatment to retailers that don’t have stores in new markets, and that it could support moves to force Tesco to sell off some landbanked properties and perhaps even some stores. Sainsbury is said to favor a less radical approach, in part because it does not want to become the victim of remedies that it recommends.
Not surprisingly, the Times writes, “Tesco is expected to insist there is no need for tough remedies because the grocery sector is already extremely competitive. It will fiercely oppose the introduction of a competition test or store and land sales.”
- KC's View:
- One cannot help but enjoy the irony of Wal-Mart-owned Asda arguing that Tesco has become too strong, too powerful, too dominant…and that government intervention is required. Granted, the UK is different from the US, and the market conditions are not the same. Still, one can only imagine what the reaction would be here if similar legislative relief were sought by Wal-Mart’s competitors.
