Do price cautious consumers benefit from supermarket expansion - Free Essay Example

Title: Write a literary review: à ¢Ã¢â€š ¬Ã‹Å"Do price cautious consumers benefit from supermarket expansion?à ¢Ã¢â€š ¬Ã¢â€ž ¢ 4000 words. This paper focuses on the question of whether expansion in the supermarket sector has produced real benefits for the retail consumer in terms of cost. It sets out to examine this issue through a collective review of the associated literature, and especially media reports, official sources, and academic publications. It will focus predominantly on the UK market as an empirical model: however, where appropriate, it will also consider the implications of globalization for British supermarkets and consumers. This topic, it may be argued, has been rendered highly topical by contemporary events. An environment of economic uncertainty has had the effect of focusing consumer and media attention squarely on retail price reductions à ¢Ã¢â€š ¬Ã¢â‚¬Å" and rises. Background and Conceptual Issues. There is no question that there has been a huge expa nsion in the UK supermarket sector over the last twenty years. Furthermore, this expansion has been multi-faceted. Not only has the number and variety of supermarket retailers grown dramatically, but the latter have been actively re-defining the nature of the business in a manner which far exceeds its former model. This diversification has seen the range of products and services available to consumers expand beyond all recognition, and one feature above all characterizes the strategy and accomplishment of this: competition on price. It is arguably a generally held principle that the supermarket business as a whole has sought, gained and maintained its competitive advantage predominantly on price. As the Office of Fair Trading observes, à ¢Ã¢â€š ¬Ã‹Å"à ¢Ã¢â€š ¬Ã‚ ¦We have received no firm evidence to show that below-cost selling and price flexing are affecting competition adversely. The opinion has been expressed to us that price-flexing has decreased since 2000à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã ¢â€š ¬Ã¢â€ž ¢ (OFT 2005: p.9) This is not to say that the sector has not also attempted to increase market share à ¢Ã¢â€š ¬Ã¢â‚¬Å" and access new markets à ¢Ã¢â€š ¬Ã¢â‚¬Å" through innovation. Online shopping and e.commerce provides a key example of this. However, the latter arguably still augments any convenience derived from internet purchases with the assurance that the customer is receiving the best available price for their merchandise. It is also important to differentiate between the principle supermarket businesses, which cannot be seen as a homogeneous block: their pricing policies are intrinsically connected to the vagaries of their own business fortunes. Asda continues to leverage on the buying power of its US parent company Wal-mart, to pressurize its rivals. The current sector leader, Tesco, with a market share fluctuating around 30%, continues to invest hundreds of millions of pounds in price cuts, to retain its self-proclaimed à ¢Ã¢â€š ¬Ã‹Å"driving forceà ¢Ã¢â€š ¬Ã ¢â€ž ¢ status in what it terms à ¢Ã¢â€š ¬Ã‹Å"bargain Britain.à ¢Ã¢â€š ¬Ã¢â€ž ¢ As former CEO Tim Mason put, à ¢Ã¢â€š ¬Ã‹Å"I believe (the) Tesco Value range has been a driving force in bringing prices down for shoppers. That is what today we sell a Value iron for under a fiver, a pair of jeans for three pounds and a kilo of potatoes for forty penceà ¢Ã¢â€š ¬Ã¢â€ž ¢ (Rigby 2005). In an age of savvy Category Management however, where planograms may attract footfall business in carefully constructed ways, this foregrounding of deeply discounted lines may mask the overall cost of essential shopping for consumers. The question which must be asked here is therefore, how true are such claims? In other words, is the case that consumers can rely totally on supermarket claims of truly competitive pricing in favour of the consumer, or is this idea a misleading one? The basic contention of this paper is that, although supermarket expansion does confer certain benefits on the consumer in t erms of price, it is not necessarily the case that continued expansion will automatically do so. As Seth and Randall suggest, there are several ways in which the cost-effectiveness of supermarket shopping for UK consumers could be measured. As they put it, two comparisons should be made: specifically, à ¢Ã¢â€š ¬Ã‹Å"à ¢Ã¢â€š ¬Ã‚ ¦what shoppers could buy the same or similar goods for in Britain, and the price levels in other countries compared with Britain.à ¢Ã¢â€š ¬Ã¢â€ž ¢. As they themselves concede however, the results are by no means incontrovertible or clear. (Seth and Randall 1999: p.259). There is also a sense in which such data would, in any case, be inadequate to address the question under discussion here. Seth and Randallà ¢Ã¢â€š ¬Ã¢â€ž ¢s argument is, in a sense, a totalizing critique, applicable to the supermarket sector as a whole. For a number of reasons, it is a generally held truism that UK consumers get a relatively poor deal compared to their continental or North American counterparts: à ¢Ã¢â€š ¬Ã‹Å"..one view is that the British grocers have managed to persuade their shoppers to accept higher price levels in return for the range and quality of goods, and the ambience of their more attractive stores.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Seth and Randall 1999: p.259). There are arguably a number of social, economic and cultural factors which could be brought to bear here. However, in absolute terms, a rather different type of enquiry needs to be pursued in this context. Specifically, the fact UK consumers on aggregate pay a higher price, may apply in spite of supermarket expansion, or because of it. In other words, the only way to identify the precise role of expansion within this equation is to isolate it, a process only practicable over a very long term analysis. This might be achieved, for example, by comparing price levels in the earlier, pre-expansion manifestation of the UK supermarket sector, with more contemporary figures. The other conceptual questi on which needs to be asked is, whether major supermarket price wars can actually have a benefit to consumers beyond the confines of the supermarkets themselves. In other words, does supermarket discount policy force other, non-supermarket high street retailers to reduce their profit margins by reducing costs to the end user? Circumstantially, the answer would seem to be yes. When struggling to explain a drop of almost 46 per cent in its pre-tax profits, previously buoyant high street player JJB Sports attributed the loss to à ¢Ã¢â€š ¬Ã‹Å"à ¢Ã¢â€š ¬Ã‚ ¦competition from rival chains, department stores, supermarkets and the internet.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Callan 2006). Research of this depth is, however, beyond the scope, and tangential to the purpose of this particular discussion. The point being made here is arguably a highly relevant one: how, precisely, can the real benefits to consumers from supermarket expansion be measured and assessed in terms of price? In terms of a literature review, how has this question been treated in the different genres of scholarship devoted to supermarket retailing? There is much circumstantial evidence to show that the proliferation of supermarket chains can and in some instances has led to an overall price reduction. For example, in 2006 the Office of National Statistics reported a 0.4 percent reduction in food and alcoholic beverages across the sector, instrumental in achieving the Bank of Englandà ¢Ã¢â€š ¬Ã¢â€ž ¢s annual 2 per cent target. (Chisholm and Scheherazade, 2006). As will be discussed below however, these general statistics can mask the important details of pricing structure in non-discretionary spending: when viewed more closely à ¢Ã¢â€š ¬Ã¢â‚¬Å" and critically -, a far more complex picture emerges. In essence, it is not the scale of the expansion but the element of true competition which exists within it, which is the most useful indication of benefit to the consumer. In other words, it is perfectly possible for expansion in retailing to militate against the interests of the consumer, if certain conditions prevail. For example, as Braithwaite reports of contemporary conditions, à ¢Ã¢â€š ¬Ã‹Å"The price of non-discretionary items, such as fuel and food has been rising sharply, a trend that affects retail in different ways.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Braithewaite, 2008). As this indicates, supermarkets have been passing on the higher supply chain costs of raw materials to consumers quite happily, a situation which can only prevail when all the major supermarket chains maintain pricing policies which are more or less aligned. Literature Review: Methodology. A key problem in deciding how to approach this topic, is that of integrating several different, but overlapping forms of literature devoted the supermarket business. In real terms this means that texts on business, performance management, corporate responsibility, business ethics, sustainability, technical and marketing specialisms, cons umer affairs, politics and economics, must all be taken into account. The issue here is that whilst all of this disciplines produce research on the supermarket sector, they do so from quite different perspectives, and for radically different purposes. This situation arises basically out of their respective authorship and intended audience: for example, a supermarket groupà ¢Ã¢â€š ¬Ã¢â€ž ¢s report to shareholders is likely to maintain a completely different perspective and argument from a report from a consumer association document, even though they might have the same business as their core subject. However, from the researcherà ¢Ã¢â€š ¬Ã¢â€ž ¢s point of view, the existence of these parallel positions is arguably a distinct advantage, since it means that the claims and counter-claims of each party may be extensively cross-referenced, and their argument objectively assessed. What, specifically, are the most useful sources for this kind of discussion? It may be helpful here to vi sualize the different types of texts available in terms of their likely objectivity, in relation to the specific question under discussion here. Where are we likely to find the most objective and reliable assessment of whether consumers benefit from supermarket expansion, in terms of retail pricing? On the industry side there are Company Reports, Corporate Responsibility Reports and Financial Statements. Government and official sources include the Retail Price Index, which offers an aggregate assessment of the pressure on consumer expenditure, Office of Fair Trading reports and proceedings, as well as the output of various standing and specially appointed parliamentary bodies. Moving on from this there are a plethora of specialist industry and marketing analyses to incorporate, followed by parties with vested interests such as investor and consumer groups, then academic and vocational literature and journals. There is also a vast amount of commentary on this topic in the UK media, w hich, it may be argued, fuels the public preoccupation with retail price movements. It can also be argued that the depth and quality of analyses in terms of contemporary events is likely to improve with the passage of time: the longer the period which elapses between events and research, the greater the increase the amount of genuinely valuable material available. Company reports and Corporate Responsibility Reports are as good as any place to start the process of research. The latter in particular are a relatively new genre in the associated literature, and their format has rapidly evolved into a recognizable format. CSR reports are not as yet a statutory requirement, in the UK, however, increasing numbers of companies are joining the ranks of those who choose to publish them. It could be argued that membership of this group represents an article of faith with consumer sentiment: as Brewster points out, the number of FTSE 100 companies who participate in this movement stood at 6 9 in 2007. (Brewster 2007). It therefore can reasonably be argued that these documents have become a space where corporations can acknowledge public concerns, and the extent of corporate responsibility can be informally agreed with the readership. As such, it is often what CSR reports omit, rather than what they include, which is of interest to the researcher. Collectively, and perhaps understandably, they say very little about the issue of price and competitiveness. Media Reporting. In this context, we are chiefly concerned with hard copy publications in the mainstream press, and in particular long established and respected organs such as the Financial Times, the Economist, and occasional specialist articles from the glossy and à ¢Ã¢â€š ¬Ã‹Å"lifestyleà ¢Ã¢â€š ¬Ã¢â€ž ¢ genre. It is argued here that, compared to other research topics, press reports on retailing have a significant import: this situation may be illustrated through comparison with another subject. Take politics as an example. If we were engaged in a literature review of a political career, party, or movement, the conclusions which could be drawn from media reporting would be superficial at best. Although such articles might be useful for foregrounding issues and identifying key factors, little or nothing of true significance could be positively decided purely from their content. Such conclusions would have to await the inevitable memoirs, publication of official papers and diaries, accounts assembled through scrutiny of Hansard, and subsequent in-depth academic studies. The competing interpretations could then be drawn up, and the usually inconclusive debate over blame and responsibility could begin in earnest. The reverse is true of contemporary economic journalism, a situation based in its content and purpose, and perceptible in the example of the Financial Times. Although it is perfectly possible for that product to be consumed for interest and entertainment, the bulk of its repor ting is functional in nature, and relies for its success on the accurate and objective reporting of events as they happen. This is because a good proportion of its private and corporate readership rely on FT reporting to help form business and investment decisions. Therefore, although its reports are, like any other journalism, subject to scrutiny and interpretation, they are unquestionably influential in forming business community perceptions and opinion. Not only will they report accurately on issues such as price, but also link such issues with those of supermarket share prices, the trust indicator of their business performance. Bearing this in mind, it is important to note the research of observers such as Braithwaite, who reports that, à ¢Ã¢â€š ¬Ã‹Å"à ¢Ã¢â€š ¬Ã‚ ¦for all the talk of supermarket price wars, there is little evidence of stark margin attrition, and food retail stocks remain far more resilient than their non-food sector counterparts, most of which are selling whol ly discretionary items.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Braithwaite 2008). It may fairly be assumed that stock prices retain their value through the maintenance of margins, itself at least partly due to a commensurate pricing ratio. Some of the clearest evidence of this comes from the rigorous analyses offered by market observers and investment fund managers, as the Financial Times reports. Contemporary supermarket group share prices appear to be based on extremely optimistic valuation multiples of price/earnings ratio, indicating a belief that earnings are recession-resistant, and the stocks consequently asset backed. As one leading analyst revealed, à ¢Ã¢â€š ¬Ã‹Å"We have doubts on both countsà ¢Ã¢â€š ¬Ã¢â€ž ¢. (Hume 2008). In terms of prices charged to consumers, this suggests that supermarkets will not be reducing their margins through heavy discounting, but will instead expect shoppers to accept pre-recession prices for their non-discretionary purchases. In any case, as John reports, in tensifying competition based on price often indicates other factors in the market, such as take-overs and forthcoming expansion, as in the case of the Morrisons bid for Safeway: à ¢Ã¢â€š ¬Ã‹Å"Morrisonà ¢Ã¢â€š ¬Ã¢â€ž ¢s gambit of 1.32 shares for each Safeway share was seen as high priced and the identification of  £250 million of compensatory cost savings was viewed as the precursor to a round of internecine cost-cutting.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (John 2003). In other words, resulting price concessions to consumers were seen as distraction and a means of maintaining short term share price and liquidity. Little attention was given to the affect on those shoppers when such tactical reductions were arbitrarily withdrawn. However, as mentioned earlier, the overall effect of supermarket price competition is not restricted purely to those retailers themselves, but may impact more generally on the prices consumers pay in the high street. As Rigby reported of supermarket discounting in 200 5, à ¢Ã¢â€š ¬Ã‹Å"The latest round is indicative of the wider trend of price discounting. Retailers such as Boots, WH Smith and Marks and Spencer have been reducing prices for months to fight off competition from supermarkets.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Rigby 2005). Similarly, the slump experienced by JJB Sports in 2006 was only addressed by matching the discounts of supermarket rivals. (Callan: 2006). Official Sources. We are here considering documents such as the Office of Fair Tradingà ¢Ã¢â€š ¬Ã¢â€ž ¢s, (Supermarkets: The code of practice and other competition issues. Conclusions. (2005), ità ¢Ã¢â€š ¬Ã¢â€ž ¢s Annual Report and Resource Accounts 2007-08, (2008), and the Competition Commission, Market investigation into the supply of groceries in the UK, (2008). Official literature features some of the most comprehensive, extensively researched and detailed texts available on the issue of supermarket behaviour. This is arguably attributable to two factors. Firstly, agencies such a s the Competition Commission and Office of Fair Trading are the platforms on which statutory responsibility for the healthy operation of markets is built. They are à ¢Ã¢â€š ¬Ã¢â‚¬Å" nominally at least responsible to the appropriate government ministries, and also have significant resources of manpower, time, and public funds to expend. This means they are by no means ineffective: as the OFTà ¢Ã¢â€š ¬Ã¢â€ž ¢s own report indicates, à ¢Ã¢â€š ¬Ã‹Å"We estimate that our efforts into preventing anti-competitive mergers saved the consumers on average around  £115 million annually over the period 2005-06 to 2007-08.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Office of Fair Trading, 2008: p.43) However, these very strengths also imply certain limitations on their operation however. In the first instance, it is by no means straightforward to insulate the governmentà ¢Ã¢â€š ¬Ã¢â€ž ¢s officiating agencies from the editorial pressures implicit in both parliamentary and extra-parliamentary lobbying. Royal Com missions, composed of M.P.s, members of the House of Lords, and invited à ¢Ã¢â€š ¬Ã‹Å"expertsà ¢Ã¢â€š ¬Ã¢â€ž ¢, and Select Committees of M.P.s, are notoriously capable of stage-managing official enquiries, to produce certain outcomes. By implication, the OFT is obliged to assume what it terms a à ¢Ã¢â€š ¬Ã‹Å"balancedà ¢Ã¢â€š ¬Ã¢â€ž ¢ approach, or, as it puts it, à ¢Ã¢â€š ¬Ã‹Å"à ¢Ã¢â€š ¬Ã‚ ¦focus on outcomes which support productivity, growth and the prosperity of the UK economy as we believe this is in the best interests of businesses and consumers.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Office of Fair Trading 2008: p.22) To the objective observer then, the extent to which government action would militate against entrenched corporate positions is a debatable point. Nevertheless, if only because of their use of conventional economic taxonomies and analyses, official sources contain some of the most closely argued cases for and against the supposed effectiveness of supermarket price competition. Take for example the Competition Commissionà ¢Ã¢â€š ¬Ã¢â€ž ¢s latest analysis of loss-leader behaviour via the mechanism of below-cost selling. As the latter observes, à ¢Ã¢â€š ¬Ã‹Å"Opinion varies as to the conditions necessary for predation to occur. We believe that for below-cost selling by large grocery retailers to be a predatory strategy aimed at operators of independent non-affiliated or symbol group convenience stores or specialist grocery storesà ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã¢â€ž ¢ (Competition Commission 2008: p.95 para.5.57) The corollary to this, as the Commission observes, is a conventional economic elasticity in such strategies: à ¢Ã¢â€š ¬Ã‹Å"à ¢Ã¢â€š ¬Ã‚ ¦for a large grocery retailer to recoup losses incurred during any predation period, it would need to eliminate all grocery retailers capable of constraining its prices so that it could subsequently increase prices and recover the profits forgone. This would need to include other large grocery retailers. Alternatively , it would have to collude with the grocery retailers that were not eliminated in the predatory phase to increase prices.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Competition Commission p.96, para 5.59). In other words, cutting prices may not benefit the consumer in the long term. Certain categories of price cuts are made purely to undercut competition: once this object is achieved, the consumer has nowhere else to go but the victorious supermarket outlet for their essential grocery or produce purchases, so they must pay whatever is being asked. The strength of official literature lays in its capacity to reveal these strategies, a fact emphasized by the recent testimony of John Fingleton, director of the Office of Fair Trading, who asserted that à ¢Ã¢â€š ¬Ã‹Å"à ¢Ã¢â€š ¬Ã‚ ¦for markets to work well for consumers, it is a fundamental principle that pricing decisions should be made independentlyà ¢Ã¢â€š ¬Ã¢â€ž ¢. He added that à ¢Ã¢â€š ¬Ã‹Å"à ¢Ã¢â€š ¬Ã‚ ¦if evidence of anti-competitive activity was found, the OFT was prepared to use the à ¢Ã¢â€š ¬Ã…“appropriate powersà ¢Ã¢â€š ¬Ã‚  to punish the companies involved, and to deter other businesses from taking part in such behaviour.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Peel, Braithwaite and Murphy, 2008). Such official sources do not come without their own inherent problems however, a fact which may be illustrated by cross referencing with related media reports. As Urry relates, the Competition Commission was recently forced to apologized to Morrisons, and pay  £100,000 in damages, after its allegations of price fixing of tobacco products were proved to be groundless. This is not to say that the supermarkets are not regularly caught with their hands in the till, or, metaphorically speaking, picking their customerà ¢Ã¢â€š ¬Ã¢â€ž ¢s pockets through collusion on price. In December 2007, a group of leading supermarkets and dairies were collectively fined a total of  £116 million for the price-fixing of milk and associated products: Tesco alone continues to contest this case. (Urry 2008). Academic Commentary. Compared to the literature of marketing the range of academic studies devoted purely to supermarket retailing is relatively small, perhaps because of the difficulty of empirical research in an atmosphere of company confidentiality. Perhaps for the same reasons, much of this literature tends to be retrospective in nature, assembling a long overview of the supermarket sectorà ¢Ã¢â€š ¬Ã¢â€ž ¢s trajectory into modernity. Typical of this sub-genre is Seth and Randallà ¢Ã¢â€š ¬Ã¢â€ž ¢s The Grocers, (1999), as well as Randallà ¢Ã¢â€š ¬Ã¢â€ž ¢s own Marketing in the Retail Trade, (1997), Jeffreyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Retail Trading in Britain 1850-1950, (1954), and Murcottà ¢Ã¢â€š ¬Ã¢â€ž ¢s The Nationà ¢Ã¢â€š ¬Ã¢â€ž ¢s Diet: The Social Science of Food Choice, (1998). Another sub-genre lays in the academic and semi-academic sphere of organizational history, biography and autobiography. Typical examples of this lay in publications such as Emersonà ¢Ã¢â€š ¬Ã¢â€ž ¢s Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s: The Record Years, (2006), Powellà ¢Ã¢â€š ¬Ã¢â€ž ¢s Counter-Revolution: The Tesco Story (1991), and Bookbinderà ¢Ã¢â€š ¬Ã¢â€ž ¢s Simon Marks, Retail Revolutionary, (1993). What, precisely, do these genres contribute to the debate about consumer benefit from supermarket expansion? From the critical perspective, the answer is that the benefits to the UK consumer are not only relative, and minimal., but also highly contradictory. For example, Seth and Randall observe that, à ¢Ã¢â€š ¬Ã‹Å"It is well known that British food retailers make margins that are significantly higher than those of their European and American rivals à ¢Ã¢â€š ¬Ã¢â‚¬Å" around 5-7 per cent compared with around 2-4 per centà ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã¢â€ž ¢, although they concede that à ¢Ã¢â€š ¬Ã‹Å"à ¢Ã¢â€š ¬Ã‚ ¦there is considerable argument about which exact figures to quote and what they mean.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Seth a nd Randall 1999: p.259). This is directly contradicted in the views of the Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s boardroom, as reported by Emerson, which assert that à ¢Ã¢â€š ¬Ã‹Å"à ¢Ã¢â€š ¬Ã‚ ¦contrary to some reports, UK food prices are generally lower than in other European countries. This is in part a tribute to our food industry as a whole, and in part due to the stronger place that retailersà ¢Ã¢â€š ¬Ã¢â€ž ¢ brands have in the UK food trade, compared to other countries.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Emerson 2006: p.230). Elsewhere, a predictably corporate line is maintained, to the extent that the whole is issue of value to consumers is subsumed beneath other considerations. As Emerson relates, the official line at Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s, when confronted with official pressure to curb prices, was that à ¢Ã¢â€š ¬Ã‹Å"à ¢Ã¢â€š ¬Ã‚ ¦the word à ¢Ã¢â€š ¬Ã…“profità ¢Ã¢â€š ¬Ã‚  had been turned à ¢Ã¢â€š ¬Ã…“an emotive term of abuseà ¢Ã¢â€š ¬Ã‚  and that à ¢Ã¢â€š ¬Ã…“the true nature and need for profit is not widely understoodà ¢Ã¢â€š ¬Ã‚ .à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Emerson 2006: p.132.). Again, this needs to be balanced against media reports which perceive the problem in another way. As Hall reports, other perspectives hold that inflated prices are the consequence of too much market liberalism, and see the need for à ¢Ã¢â€š ¬Ã‹Å"à ¢Ã¢â€š ¬Ã‚ ¦a public policy, a means of intervention and stabilization.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Hall 2008). Crucially, organs such as the FT also provide a platform for perspectives which argue that supermarket pricing will, eventually, militate against the UK consumerà ¢Ã¢â€š ¬Ã¢â€ž ¢s best interest. Take for example the plight of small producers who, cumulatively, represent a key factor in food security of supply, but may not be able to withstand the short-terms pressures on margins which supermarkets demand. As Henley reports, à ¢Ã¢â€š ¬Ã‹Å"The supermarkets are well aware of this but their view is, let the market work. Yes, it will work eventually, but only after many farmers have gone out of business and supply falls dramatically. Farming is long term. I must look a year in advance and decide what to do but accept what is offered every Friday. In my view, with size comes responsibility. In order to ensure future supplies, sometimes and now is definitely one of those times à ¢Ã¢â€š ¬Ã¢â‚¬Å" the market must be ignored. We must never forget that food is needed every day, by everyone.à ¢Ã¢â€š ¬Ã¢â€ž ¢ (Henley, 2008: n.p.). This, in a sense, is another form of loss leadership, albeit distributed along the supply chain. As the commentator points out, the gradual elimination of small producers is one means by which supermarkets preserve their margins. Ultimately, it is debatable whether this is in the consumerà ¢Ã¢â€š ¬Ã¢â€ž ¢s best interests in terms of the variety and quality of food available. Bibliography. Arnold, M., à ¢Ã¢â€š ¬Ã‹Å"Private equity chief in warning on code.à ¢Ã¢â€š ¬Ã¢â€ž ¢ , Financia l Times, : November 18 2007 https://www.ft.com/cms/s/0/067ae5a2-9605-11dc-b7ec-0000779fd2ac.html , [viewed 22.10.08], n.p. 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