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Last Updated: Wednesday, 15 February 2006, 15:26 GMT
UK corner shops 'risk dying out'
Shop shelf
Small shops act as 'social glue', the All-Party Group found
Small and independent shops may vanish from the UK's High Streets by as soon as 2015, politicians have warned.

Corner shops are being squeezed out of the market by supermarkets and large rivals, the All-Party Parliamentary Group for Small Shops said.

However, the British Retail Consortium said the group was "trying to turn the clock back".

It comes ahead of an Office of Fair Trading ruling on whether to refer the market to competition watchdogs.

Concerns over alleged "predatory" - or below-cost - pricing methods at supermarkets and their increasing presence in the convenience store sector have prompted calls for a Competition Commission investigation into the 120bn grocery market.

Binding communities

The parliamentary group said that if smaller stores were squeezed out, there would be social, economic and environmental consequences felt by local communities.

REPORT PROPOSALS
Shopper in the street
Suspend takeovers until plans to secure the diversity of the sector are brought forward
Establish a regulator
Bring in comprehensive code of practice
Revise retail property market
Encourage transformation of Post Office network
Tax system review
Give local people greater say in decision-making process
Develop regeneration units in all local authorities
Source: High Street Britain: 2015

"The erosion of small shops is viewed as the erosion of the social glue that binds communities together," the all-party group said in a report entitled High Street Britain: 2015.

Group member Philip Hollobone, MP for Kettering, added that smaller retailers feared they would no longer be able to compete against bigger retailers if current trends continue.

"As consumers, we may be benefiting in the short term from the low prices and the attractive offer that supermarkets can present to us, but in 10, 15, 20 years time, the prices we pay for our... supermarket goods, may actually be rather higher than we would wish."

Taking control

To halt store closures, the MPs made a number of recommendations, including setting up a retail regulator and suspending further mergers and takeovers in the sector until its future is decided.

UK RETAILING
UK retail sales totalled 246bn in 2004 - that's more than the combined economies of Switzerland and Ireland
Half of the 278,630 shops in the UK are owned and managed by a sole trader; 103,000 have fewer than five employees
The UK retail sector employs 3.1 million people, supplying one in every nine jobs
Retail is the largest employer in rural England, providing 16% of jobs
Source: High Street Britain: 2015

Click here for a copy of the report:

The Forum of Private Business, which represents small and medium-sized firms, welcomed the findings.

"The government needs to look at the inexorable growth of the supermarkets to try to come to some kind of control," said Forum spokesman Ben Pinnington.

Charities also backed the report's recommendations, with War on Want urging the government to also take into account of the effect that UK supermarkets have on poor communities in developing countries.

'Still be around'

But the British Retail Consortium (BRC) dismissed the report and accused the all-party group of "trying to turn the clock back and reverse some well established trends in consumer shopping habits".

Instead supermarkets and large multiples have grown as they have met the changing needs of customers, said Kevin Hawkins, the BRC's director general.

The consumer is the best regulator and there is room in a thriving market for anyone who satisfies customers
Lucy Neville-Rolfe, Tesco

"The secret of success for the small retailer... is to offer consumers something different, something better and something targeted very precisely at a particular portion of the market," Mr Hawkins added.

Tesco also denied that smaller shops were at risk, arguing that consumers use both supermarkets and corner shops at different times.

"As the report acknowledges, the retail market is fiercely competitive," said corporate affairs director Lucy Neville-Rolfe.

"My conclusion is that the consumer is the best regulator and there is room in a thriving market for anyone who satisfies customers," she added.

Former Asda chief Archie Norman warned regulatory restrictions would not succeed and a better solution would be to encourage small enterprises to set up and compete.


BBC NEWS: VIDEO AND AUDIO
One shopkeeper on the effect of supermarkets



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