CMA to investigate competition failure among supermarkets

The Competition and Markets Authority (CMA) has announced that it will be “stepping up” its work in the grocery sector to see whether any failure in competition is contributing to grocery prices being higher than they would be in a “well-functioning” market. 

This comes as cost-of-living pressures have grown, and along with road fuel, the authority identified groceries as an “early priority” for investigation.

The CMA first started looking into unit pricing practices online and in-store earlier this year. 

According to the authority, the prices that consumers pay for their food shopping are due to competition between retailers, between suppliers, and between raw material providers. 

As a result, the CMA said it will work “in a targeted way”, focusing on those areas where people are experiencing the greatest cost-of-living pressures. 

While global factors have also been the main drivers of grocery price increases, the authority concedes that at this stage it has not seen evidence that points to specific competition concerns, yet is looking to be sure that weak competition is not “adding to the problems”. 

The CMA has a vital role to play in giving consumers assurance that competition in critical markets is working well, so they can exercise choice with confidence.

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.”

She added: “Grocery and food shopping are essential purchases. 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.”