If people chose to shop at a Tesco and other shops eventually close wouldn’t that just be fair competition?
No. Small, local independent retailers in an area like Mill Road inevitably struggle to compete with a company as powerful and aggressive as Tesco, however good they are. Supermarket giants like Tesco use a variety of means to draw customers away from other shops – some legal, some not. For example, Tesco and the other big supermarkets have enough economic power to enable them to sell staple goods at a loss as a way of drawing in new customers (’loss leaders’). Their wealth also enables them to run short-term voucher schemes in new stores, offering huge discounts until the viability of rival shops is threatened. Then the prices go up again. Obviously, local independent shops don’t have the resources to run similar schemes. Less legally, Tesco was also one of four supermarkets involved in a cartel with dairy companies to fix the prices of milk, butter and cheese, according to the Office of Fair Trading last year. This isn’t the only ruling relating to Tesco’s anti-competitive practices
Related Questions
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- Would that be fair, since many people hold the Bells responsible for driving smaller rivals out of business?
- If people chose to shop at a Tesco and other shops eventually close wouldn’t that just be fair competition?
