Tesco Accused of Undercutting Independent Shops Through Booker Wholesale Business

Independent retailers accuse Tesco of undercutting them through its Booker wholesale arm, raising concerns over market dominance and fair competition.

Hadeel Hashem
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Tesco Accused of Undercutting Independent Shops Through Booker Wholesale Business

Tesco Accused of Undercutting Independent Shops Through Booker Wholesale Business

Independent shopkeepers have raised concerns over Tesco's pricing strategies, alleging that the UK's biggest supermarket chain consistently sells products for less in its stores than through its Booker wholesale business. Out of a list of 50 items stocked by Booker, approximately a quarter were found to be cheaper in Tesco stores, including products offered through Tesco's Clubcard Prices loyalty discount scheme.

Examples of the pricing disparity include juices, grapes, and lettuce that are sold at lower prices in Tesco stores compared to Booker's wholesale rates. Independent retailers claim this has worsened since Tesco acquired Booker in 2017, despite promises that the deal would benefit shoppers and independent shops by leveraging combined buying power.

Shop owners express frustration over the lack of price parity, particularly during promotions and loyalty discount periods. "Tesco is taking their influence on independents even further," said one retailer, highlighting significant price differences between Tesco's Clubcard offers and Booker's wholesale prices.

Why this matters: The accusations against Tesco underscore the challenges faced by independent retailers in a market dominated by major supermarket chains. The pricing disparity raises concerns about fair competition and the potential impact on the viability of local businesses.

In response, Booker defends its pricing strategy, emphasizing its competitiveness and commitment to serving retail customers. However, village stores have also complained about reduced product ranges, restricted supplies, and delivery reliability issues with Tesco's cash-and-carry arm, adding to the pressures they face.

The UK's competition watchdog, the Competition and Markets Authority, is currently examining the grocery wholesale market and the impact of loyalty card discount schemes. However, it has not yet commented on whether it will investigate Tesco's Booker business specifically in light of the recent allegations from independent shopkeepers.

Key Takeaways

  • Independent shops allege Tesco sells products cheaper in its stores than Booker wholesale.
  • Tesco's Clubcard Prices offer lower prices than Booker's wholesale rates for some products.
  • Retailers express frustration over lack of price parity, especially during promotions and discounts.
  • Concerns raised about fair competition and impact on local businesses in Tesco-dominated market.
  • UK competition watchdog examining grocery wholesale market and loyalty card schemes, but no comment on Tesco-Booker.