Have supermarkets become too big to the extent

Have supermarkets fit too queen-sized to the extent that they be damaging tilt? BY ela1210 The growth of supermarkets does however use up nearly benefits for competition. Firstly, due to the uniformity of products, termss ar easily comparable across stores for consumers. This gist they can compare pricing strategies of dfferent supermarkets and see which has the most competitive pricing, therefrom ingest the best deal available to them, increasing competition and allowing consumers to create a more Informed choice when buying.Prices of commodities do not undulate a lot ecause of this, as competitors must malntaln constant prices, therefore consumers do not have to worry about the price of necessary Items changing suddenly. Global commodity prices are therefore determined by the market, kinda than by the retailers such as the large supermarkets.For example the number of dairy farm farms In Brltaln fell by more than 40% between 1995 and 2005, nevertheless It Is clear t hat supermarkets are not to blame for this as the price of milk Is set mainly by demand and as a ending of this, the remaining farms incomes and herd sizes have increased as well as their profitability improving greatly. Supermarkets today use online selling methods to reach a wider market, also increasing competition which is possible due to their size as well. Selling via the internet improves the quality of service a consumer receives from a company, especially as they are competing for business with rival supermarkets.Online selling also stools obtain easier for consumers, benefiting competition. This competition means supermarkets are constantly motivated to stay mod and provide a good service, as to ensure they do not lose customers to rival companies. The large supermarkets are consequently able to conjure ore efficient services to consumers in response to needs they have identify while trying to be competitive. For example offering prepared vegetables, this saves activ e consumers time and in turn makes them become more appealing.Alongside this, as supermarkets go on such a large scale, they are advantaged by legion(predicate) economies of scale such as bulk buying stock, mass merchandising campaigns and transport methods, lowering their cost. The swelled supermarkets can then pass these nest egg on to consumers through reducing the price of products and increasing competition indoors the market. This would benefit competition through avoiding artificially high prices for products which are widely sold. Through implementing and demanding more economies of scale, producers and suppliers will have to become more competitive, and as a result will Improve the quality of their produce.Therefore It cannot be tell that supermarkets are soley damaging for competition as there as well-nigh advantages of their size for consumers as well as producers, which Is Increasing competition. 2) Have supermarkets become too big to the extent that they are dam aging competition? It Is argued that supermarkets have become too big to the extent that hey are damaging competition as there are only a handful of them magisterial the food market Tesco, Asda, Sainsburys and Morrisons to name a few. Because of their ultimately is their competition. By eliminating their rivals i. e. ompetition they are or going towards becoming an oligopoly market. Being an oligopoly means having a satisfying market share in the industry, high barriers to entry, huge sunk and set-up costs which all lead to less competition. This ultimately lowers the number of firms in the industry, as named above, which means less choice for consumers. This can be argued simply by a price comparison between local food stores and the big supermarkets. Prices have become very transparent between the so called competitors from the big supermarkets as their price differs only by a fraction.The question call for to be asked is how much lower can they reduce their prices and still ma ke a handsome profit, yet we see no significant price decreases from any of them, apart from their well known offers of buy 1 get 1 FREE or the nations favourite Half Price on selected items, which are all part of their marketing strategy to get ustomers into their supermarkets and psychologically persuading them in purchasing something they had no intention of purchasing before acquiring there.