Efficiencies Analysis for Retail Sector Mergers

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Series Details Pages 285-310
Publication Date December 2006
ISSN 1744-1056
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"Concentration in the retail grocery sector has been increasing at a rapid pace in European countries. In 1992, the top 10 grocers in Europe accounted for 27.8% of total grocery sales. Only 5 years later, that share had increased to 36.2%. Concentration in the UK industry is much higher, with the four largest grocery retailers accounting for approximately 75% of sales in 2000. The UK industry is exceeded in concentration only by the smaller economies of Sweden, Denmark and Switzerland. The Canadian retail grocery sector is also highly concentrated, with the largest four sellers accounting for more than 60% of sales on a national basis.
It is not surprising, therefore, that concerns have emerged about the implications of such increasing concentration for the exercise of market power, with respect to both consumers (“seller side market power”) and suppliers (“buyer side market power”). Retailers, including grocery chains, effectively participate in two product markets: the supply of goods and services to consumers, and the supply of concentrated and organised access to consumers (shelf space). Other concerns about the exercise of market power include, for example, that smaller convenience stores are being unfairly disadvantaged."
Source Link https://doi.org/10.5235/ecj.v2n2.285
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