Big chains' mall deals damaging to others
The Competition Commission has found that long-term exclusive lease agreements by SA's major supermarket chains at shopping centres were preventing new competitors from getting a foothold.
The commission released the provisional findings of a multi-year inquiry into the SA retail market yesterday, Fin24 reports. Ahead of the official release of the report, the commission said emerging retailers were being 'foreclosed from the shopping centre environment' where SA shoppers buy half their groceries, due to exclusive leases held by big chains.
The commission announced the inquiry in late 2015 to probe whether the retail grocery sector prevented or restricted competition.
'The inquiry finds it concerning that their growth and competitive ability has been substantially limited because of exclusion from the shopping malls,' the commission stated.
It also found that national supermarket chains were better able to negotiate rebates for goods than independent retailers, which helped them reduce costs and gave them an 'unfair competitive advantage'.
The entry of national supermarket chains in to new areas, meanwhile, was also found to have led to a decline in the number of independent retailers, but also increased choice and lowered prices.
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