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Complete 3 page APA formatted essay: Have supermarkets become too big to the extend that they are damaging competition, and does the dominance of the big four supermarkets in the grocery market mean t
Complete 3 page APA formatted essay: Have supermarkets become too big to the extend that they are damaging competition, and does the dominance of the big four supermarkets in the grocery market mean that there is an increased risk of consumers getting a poor deal.
This is because the more supermarkets become larger, the more they attract customers especially because of the fact that they use strategies that cannot be used by smaller competitors. For example, major supermarkets lower the prices of their goods and achieve profitability by selling more. On the other hand, small shops raise their prices to cover for the low sales that they record in order to achieve profitability. This definitely favors supermarkets because consumers generally prefer to shop in areas where they can get goods at cheaper prices. Therefore, it can be said that the fast growth of supermarket damages competition (Competition Commission, 2007).
Another way through which the supermarkets kill competition is by way of stocking almost everything in one shop. Major supermarkets, stock almost all goods that people want especially household goods. Today, supermarkets stock goods and services that they never stocked in the past as a way to attract customers. Today, supermarkets have salons, car service bays and hardware and building goods among others. as such, they outcompete the shops that would like to stock particular things and specialize in them because many customers prefer to shop in supermarkets where they know they can find all or most of the goods and services that they want.
Despite the fact that there have been reports that supermarkets put independent traders out of business, supermarkets have claimed that they employ thousands of people and are supported by their customers. while this might be true, many businesses run out of customers because they cannot resist the urge to shop in supermarkets that have ample parking and walking spaces and have more customer attendants compared to the independent traders (Reardon & Gulati, 2008).
Major supermarkets attract suppliers compared to smaller traders because they
