Additionally, the small companies who have invested in the industry and command small market share have been acquired by the large companies as Morrison increasing its market share. The top six supermarkets also get the benefit of having a big influence in price negotiation with the cartels of suppliers and ultimately influencing the economies of scale (Gillson et al, 2004, pg. 69). But to maintain the competitive nature of markets external bodies ought to regulate the operations of some of these companies.
With less than ten supermarkets controlling the large market share the consumers will be short of choice from which to choose from. Ideally, many companies competing for the market dominance and bigger customer base, the consumer is usually faced with many choices from which they can make decisions (Competition Commission, 2008). However, the top six chain stores inUKhave limited the consumer choices significantly especially when the stores are sparsely located in some regions. The tastes and preferences of the consumers therefore are largely dependent on the geographical distance and convenience (George et al, 1992). Only the large companies therefore are able to open stores in the rural and urban regions hence he large market share.
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