"Big Four" Supermarkets face forced land sell-offs

by Business Case Studies on Wednesday 27th February, 2008

“Big Four” Supermarkets face forced land sell-offs

The Competition Commission watchdog has published its provisional report following an 18 month probe into supermarkets. One of its findings is that supermarkets buy land to block rivals. The Commission set out plans that could result in the”big four” grocers (Tesco, Asda, Sainsbury and Morrison) having to sell off land they are hoarding to block their competitors from setting up in a town. Consultants CACI believe the land held could total 54 million sq ft – enough space for 20,000 homes. (Daily Mail, 1 November 2007)

The report also highlighted how shoppers in certain towns lacked any choice of supermarkets. (The Telegraph, 2 November 2007)

The watchdog also wants to make it easier for Asda, Sainsbury and Morrisons to set up stores in towns where they would create extra competition for Tesco. (Daily Mail, 1 November 2007)

Peter Freeman, chief of the Competition Commission said: 'Consumers are getting a good deal from supermarkets and Tesco is not too dominant.' (Daily Mail, 1 November 2007)

Land Securities features as a case study in Times 100 and shows its its use of business strategy and planning cycle which helps to provide a clear direction for its land management business.

Sources:

The Times 100 Edition 12 Case Studies – Land Securities, Using strategy and planning to measure, monitor and report performance

The Telegraph – Supermarkets are not all bad claims regulator – 03/11/2007

This is Money – Company Overview

Tesco Read the Comission Report in full

Potential Study Questions:

  • Land Securities employs KPIs to meet its targets. KPIs may have a financial or non-financial focus. Give an example of each.
  • Assess the possible effects on a local community of a large area of unused land being held by a supermarket to prevent a rival setting up. Do you think this is good land management?
  • For Economists: The Competition Commission is one of the independent public bodies which help ensure healthy competition between companies in the UK for the benefit of companies, customers and the economy. It investigates and addresses issues of concern in three areas. What are they?

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