Buying Up Britain - supermarket operations - Industry Overview

Ecologist, The, Nov, 2000 by George Monbiot

His company's advertised cuts were not all that they seemed, however. In December 1999, the Advertising Standards Authority ruled that Asda's promotional campaign, which claimed that prices would stay 'permanently low' was misleading: after a short period, many of them rose again. [42]

But the strategy seemed to work. In February 2000 the Competition Commission reported that there was 'only limited evidence of excessive profitability', as food prices had recently risen more slowly than general retail prices. [43] It did, however, conclude that the five biggest supermarkets were involved in two complex monopolies: the first relating to the pricing of groceries, the second concerning the power they wielded over their suppliers. But while it warned that it could force them to sell off some of their stores or could ban the use of loss leaders, the wording of its initial report made it clear to the superstores that it would do no such thing. One prominent retail analyst commented, 'This is as good as they could have hoped for, It is not ordering them to do anything but carry on.' [44] Critics of the superstores believe the Competition Commission has been fooled.