Independent shopkeepers have raised accusations against Tesco, claiming that the supermarket giant is undercutting them by selling products for lower prices in its stores than in its wholesale business, Booker. Despite Tesco's acquisition of Booker being marketed as beneficial to independent retailers, shop owners argue that many items stocked by Booker are priced more competitively in Tesco's own stores. This issue is exacerbated by Tesco's Clubcard Prices loyalty discount scheme, which further widens the pricing gap between Tesco and local retailers, causing distress among independent shopkeepers over Tesco's perceived competitive advantage in the market.
Examples provided by independent retailers illustrate the pricing differences, with various items available at lower costs in Tesco stores compared to Booker wholesale outlets. This disparity has sparked worries among independent shopkeepers about Tesco's market dominance and its potential negative impact on local businesses. Despite the initial expectations that Tesco's ownership of Booker would lead to benefits for independent retailers through combined buying power, shop owners are disappointed by the lack of price parity and limited product choices at Booker outlets, which predominantly feature price-marked items, leaving small businesses facing higher operational costs with reduced affordability. Booker defends its pricing strategy as competitive within the wholesale market and highlights its dedication to serving retail customers; however, independent shopkeepers argue that Tesco's influence has resulted in pricing discrepancies and increased financial strain on small businesses.
While the Competition and Markets Authority is already investigating loyalty card discount schemes, including Tesco's Clubcard, no official statement has been made regarding potential intervention to address concerns in the grocery wholesale market. The pricing inequities emphasized by independent shopkeepers shed light on the broader challenges faced by small retailers in an industry dominated by major supermarket chains, indicating a need for closer scrutiny and potential regulatory actions to ensure fair competition and support for local businesses.