The supermarket industry in the UK is dominated by large, powerful firms

The supermarket industry in the UK is dominated by large, powerful firms

The supermarket industry in the UK is dominated by large, powerful firms, including Tesco, Asda, Sainsbury’s and Morrisons. These firms controlled 75.2% of the market in 2011; Market share of UK supermarket industry, 2011(% of total grocery sales): * Tesco – 30.6% * Asda – 16.8% *Sainsbury’s – 16.3% * Morrisons – 11.5 % —Total 75.2%— The UK’s Competition Commission investigates issues such as market dominance. It had concerns about dominant supermarket firms having an unfair advantage over other grocery retailers and the effects that this has had on producers, such as farmers, and consumers. One effect has been that many small grocery businesses have been unable to compete and have therefore closed. However, these dominant supermarket chains are keen to point out the benefits that their size brings to both consumers and producers. a) Explain one benefit to UK consumers of large supermarkets. b) Explain the effects on producers of large firms dominating the UK supermarket industry c) Do you think that the government should do more to control the firms which dominate the UK supermarket industry? Give reasons.

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