Outline the argument supermarket power is a zero -sum game BY bluebell Outline the argument that supermarket power Is a ” zero-sum” game Before we discuss the argument let us understand first what the terms ” power” and ” zero-sum” mean. Power is a complex term used denote influence, control and domination, (Taylor, et al. 2009, p. 59). The power used by supermarkets includes buying and market power. The big four supermarkets in the U. K. Account for approximately 75% of thefoodand groceries market therefore giving them significant market power.
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Their buying power Is the ability they have to negotiate prices with suppliers and the rage chains thus being able to demand discounts when buying In such large quantities. This gives them the ability to influence things such as pricing, for example offering goods at below cost prices. The term zero-sum game is used when one party’s gain will be another’s loss therefore equaling a zero sum. A good example of this is slicing a pie, if one person takes a large slice there is less for everyone else.
The pro supermarket campaigners argue that the supermarkets use their power for good and all parties Involved benefit to some extent creating a positive sum gain but he the following argues to the contrary__ As shoppers they offer us a wide variety of products at affordable prices, in accessible locations. Additionally they offer employment, boosting local skills and helping to draw in other businesses such as restaurants and retailers to sometimes failing local economies but at what cost to others?
Do the low prices mean that somewhere down the supply chain someone else’s profits are being squeezed? Has the out of town retail park been a catalyst In the decline of Britain’s high streets? In 2006 retail commentator Judi Bean reported hat the big four operated around 3900 stores with Tests alone taking one pound at the tills for every three we spend. Since then they have continued to grow branching out into the corner shop concept and opening an additional 1500 stores in a bid to capture even more trade.
In years gone by our towns would have a variety of independent shops made up of butchers, bakers and fishmongers, but these are in decline and we are now dominated by by big chain stores offering us practically Identical goods at very similar prices. If this Is the case are they really offering us any hospice at all? Across the country they monopolies towns and areas where small local businesses are unable to compete on pricing being forced to shut down.
Food writer Joann Blackman, (2005) uses Dundee as an example and recalls that in the sass the town had ten bakers; now there are two left, five fishmongers with one remaining and eight or nine butchers only one of which has survived and six grocers where again only one has survived.. In their place are four Testes, two Sad, a Morrison and a Kingsbury. In her pollen there Is a distinct correlation between the arrival of the gig chains and the demise of the small independents, thus implying a zero-sum game.
The supermarkets have an immense buying power and their supply chain stretches across the globe. When dealing with the large conglomerates like Proctor and Gamble, Milliner and Nestle the balance of power is pretty much even, as their global muscle puts them in a strong position to negotiate. However the farmers, such a fortunate position. Small suppliers claim that the supermarkets are continually putting pressure on them, coercing them into prices cuts that push them to the point that there economic livelihood is in doubt.
This relationship between the suppliers and supermarkets can be depicted as a David and Goliath affair, with the small independents up against the big multiples Just as the small independent stores on the high street are up against the big chain stores as previously mentioned. With this pressure being applied to suppliers to keep costs down they in turn pass this on to their employees. Here in the I-J we have low paid often migrant workers cutting, sorting and packing vegetables and salads for the big stores.
Felicity Lawrence has written about the exploitation of these workers in her book Not on the Label (2004) and in newspaper investigations. She highlights how agency workers, often from eastern European countries such as Romania, Poland and Bulgaria, are employed by ” gang masters” to work on farms and in processing and packing plants and are frequently paid hourly rates below theminimum wage, are subjected to illegal deductions and are bussed from Job to Job at their employers will.
These people are not directly employed by the supermarkets but, she claims, that they are aware of the practices and turn a blind eye to it so they can continue to benefit from he situation. Additionally she points out that you will not see any such evidence of this on labels of the packets of salad or bags of chicken pieces which line their shelves. Lawrence implies that we as consumers can indulge in cheap products at the expense of those exploited and often vulnerable workers.
You could therefore infer that the supermarkets are using their power or dominance to control the labor market. For us to gain from the low prices at the checkout someone else must lose out in the case it is the suppliers and their workforce. With this in mind let us look rather field at the workers in such places as Bangladesh. In 2006 and 2007 The War on Want, a U. K. Based non-governmental organization, made accusations against Sad and Tests that they were boosting profits and the expense of the workers in the sweatshops of Bangladesh.
They carried out a survey in six large facilities in Dacha, each employing between 500-1200 workers. The results of the survey showed that the worker, of which the majority are female, had been subjected to overcrowding and unhygienic work conditions along with forced overtime and verbal intimidation, tit access to trade unions being refused. All the factories surveyed were known to be supplying cheap clothing to the I-J market, specifically Tests and Sad and all were paying wages below that needed to provide for themselves and theirfamily.
The pressure applied by the stores on the factory owners to keep costs down means that they have no room to maneuver. The war on want claim that it the absence of a living wage in such places that keep our Jeans, shoes and other clothing at such low prices. Taking all of the above into account we can conclude that although we as nonusers benefit from low pricing and abundance of choice and the supermarkets continue to increase their profits, there are many within the chain that don’t benefit so greatly.
We can therefore say that supermarket power is definitely a zero sum game. Word count – 1134 Bean, J. (2006) Trolley Wars: The Battle of the Supermarkets, London, Profile Books Blackman, J (2005): Shopped: The shocking Power of British Supermarkets, London, Profile Books Lawrence, F (2004) Not on the Label, London, Penguin War on Want (2006), fashion Victims: The true cost of cheap clothes at Primary. Sad and Tests, London,