Grocery Retailers and Regional Monopolies

The recent Competition Commission inquiry into supermarket retailing highlighted the existence of spatial monopolies in certain areas of the UK. This paper explores their extent and examines future retail expansion opportunities in light of the report's recommendations. Using a number of indicators, we assess the geographical incidence of monopolies and provide a series of 'what-if?' analyses of how retailers might achieve growth. We examine how further market concentration might exacerbate existing monopolies/duopolies and consider the store divestments retailers may be prepared to undertake to increase their market shares. The overall pattern of retail provision in the British market is found to be highly complex at the subnational level. The indicators examined highlight monopoly/duopoly situations in under-provided areas, particularly relating to Tesco and Sainsbury in South East England. We suggest that merger/acquisition amongst the top firms might provide opportunities for other retailers to enhanc...