According to independent British retailers, Tesco – the UK’s largest supermarket chain – is constantly trying to undermine them selling in its stores products at lower prices than those of its wholesale business (Booker, ed).
As The Guardian recalls, Tesco – which has the 27% of the UK food market – bought cash-and-carry group Booker in 2017 for £3.7 billion, saying the deal would benefit independent shoppers and retailers.
But independent shopkeepers who are customers of Booker claim that – on a list of 50 items stocked by the UK’s largest wholesaler – approx a quarter is cheaper on the shelves at Tesco. Including five items on offer with the supermarket’s loyalty discount scheme.
Examples include: the bottle of Innocent orange juice, which had a wholesale price of £2.25 at Booker, but could be purchased for £2 at Tesco by Clubcard holders; The juice of Rubicon sparkling mango, which had a wholesale price of 39p a can at Booker versus 37p at Tesco or 33p for Clubcard holders; L’seedless grapes at a wholesale price of £3.98 from Booker versus £3.60 from the parent group’s supermarket and a iceberg lettuce with a wholesale price of 95p, compared to 79p at Tesco.
Many other items were sold with prices printed on labels ensuring higher prices in independent shops than in Tesco stores.
A Booker spokesperson said: “We work very hard to offer our retail customers the best choice, price and service. Our pricing position relative to the wholesale market is extremely competitive, and over the past year we have embraced it 354 new partners net retail, with retail customer satisfaction ranging from 6% to 82%.”
“The balance we try to strike is to make sure we have the most attractive pricesthe better availability and the right assortment, enabling our resellers to grow their businesses and earn sales on key market trends. We continue to invest in our retail business to better serve our retailers.”
Booker is considered a benchmark for its prices compared to other wholesalers and the supermarket Tesco has no role in setting prices.
It’s not something new
Last month the Guardian reported complaints from village shops who accused Tesco of using its cash-and-carry scheme to drive them out of business by limiting food supplies and deliveries.
Independent retailers, many of whom also operate local post offices in remote rural locations, claimed that a series of changes recently introduced by Booker were increasing pressures at a time when some villages were left with only one small shop or even none at all. They also argue that Booker has reduced the assortment of items available by up to 30% at some sites, recalled customers’ favorite products, and reduced the availability and reliability of deliveries.
One wholesale competitor said it had seen an influx of independent retailers unhappy with Booker’s treatment of them: “The basic prices are very competitive, but the cost of the service (delivery charges and discounts for buying large volumes) is getting worse.”
The UK’s competition watchdog has not said whether it will intervene to scrutinize the wholesale food market. However, it is taking an interest in the issue of food inflation and is already assessing whether loyalty card discount schemes – including Tesco’s Clubcard scheme – are having a negative effect on the food market.
Source: The Guardian
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