The Competition and Markets Authority (CMA) is to step up its work in the grocery sector to understand whether any failure in competition is contributing to grocery prices being higher than they would be in a well-functioning market.
The prices that consumers pay for their groceries are the result of competition at three main levels of the market:
- Competition between retailers, where consumers shop for their products.
- Competition between suppliers who make the products and sell them to the retailers.
- Competition between raw material providers who provide the inputs to food suppliers.
Given the need to provide findings swiftly, the CMA says it will do this work in a targeted way, focusing on those areas where people are experiencing greatest cost of living pressures.
This new phase of its work will cover:
- First, completing work to assess how competition is working overall in the grocery retail market, drawing on publicly available data and other information.
- Second, in parallel, identifying which product categories, if any, might merit closer examination across the supply chain.
The CMA will engage with a wide range of industry participants, experts, and other stakeholder groups to inform its assessment. It will provide an update on this work over the coming months.
Sarah Cardell, chief executive of the CMA, said: “The rising cost of living is putting people and businesses under sustained financial pressure. The CMA is determined to do what it can to ensure competition helps contain these pressures as much as possible.
“We are not satisfied that all the supermarkets have been sufficiently forthcoming with the evidence they have provided in our Road Fuel market study, so we will be calling them in for formal interviews to get to the bottom of what is going on. It is a priority for the CMA to publish a full and final report, including recommendations for action, by the beginning of July.
“Grocery and food shopping are essential purchases. We recognise that global factors are behind many of the grocery price increases, and we have seen no evidence at this stage of specific competition problems. But, given ongoing concerns about high prices, we are stepping up our work in the grocery sector to help ensure competition is working well and people can exercise choice with confidence.”
