Magazine article Marketing

OFT Probe Would Clear the Air

Magazine article Marketing

OFT Probe Would Clear the Air

Article excerpt

OFT probe would clear the air

At the end of the day, the DTI will have to order an Office of Fair Trading inquiry into supermarket pricing. This is not the ranting of a business-bashing Labour Party but the conclusion of ex-Reckitt marketer and Tory MP for Northampton South Michael Morris.

According to Morris, the grocery multiples' stranglehold on the nation's food shopping is the biggest obstacle to further cuts in inflation and a hindrance to real consumer choice. The supermarket's decade of margin building means their profits are now way out of line when compared to their rivals across the water.

Morris' mini-campaign is highly significant. It is a sign that the tide of favourable circumstances that has swept the multiples forward is turning. The supermarkets now dominate grocery. And it is time the nation sat back and took stock.

Analysts in the City have already started. They are fretting about the multiple's cash-gobbling plans for ambitious expansion into a saturated market. The public reassessment started when the retailers publicly rammed home their tremendous power by deciding to flout UK law on Sunday trading. And, as discounters burrow away at the bottom, the political focus is shifting to those margins. …

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