he Competition Commission’s inquiry into grocery retail will delve beyond the Big Four supermarkets and try to address the supposed root of recurring xenophobic violence – the alleged competitive secrets of foreign shopkeepers. The terms of reference for the commission’s second whack at the grocery retail sector was gazetted on Friday morning, revealing an ambitious attempt to scrutinise the entire retail sector, from street traders to supermalls.
The inquiry is premised on the problem of a disappearing small and informal retail sector in the face of the rise and rise of shopping centres in townships, according to the commission’s background statement in the terms of reference.
In the terms published in the Government Gazette, the commission cites the four major supermarket chains as now controlling 90% of the market.
Back in 2009, the commission launched an investigation into the four major supermarket groups, which was eventually pared down to an investigation into the exclusive lease agreements that turn one supermarket into the master of any particular shopping mall.
That investigation was abandoned last year due to a lack of evidence, but now the lease issue is back on the table as part of a far more expansive probe.
The commission also seems interested in supermarket chains’ franchising agreements as franchisees are in effect branches of the franchisor with no discretion in terms of pricing or sourcing stock. The implication is that even though the stores are owned by small companies, they still contribute to the dominance of the company under whose brand they operate.
Much of the new inquiry’s scope is, however, in the contentious terrain of small retailers – formal and informal – who claim they are being displaced by