Structural Changes in Grocery Retailing: The Implications for Competition

Abstract

The structure of the UK food manufacturing industry is highly fragmented and consists of some 5,000 firms. Of these, however, the ten largest companies are estimated to account for one-third of all sales. The importance of the 100 largest private sector firms has traditionally been relatively high within the industry and in 1975, for example, they produced 55 per cent of the food sector's net output, compared with the 40 per cent provided by a similar sample in the total manufacturing sector. Similarly, evidence from both Ashby and Mordue demonstrates that during the 1970s the average size of food manufacturers/processors overtook that of manufacturers as a whole in terms of numbers employed. By the same measure, businesses with more than one hundred employees continued to expand at a faster rate in food than the average for all manufacturers, so that the mean employment size of these larger food enterprises in the late 1970s was more than one-third greater than in all manufacturing. Smaller establishments, by contrast, are relatively under-represented in the UK food, drink and tobacco sector, both in comparison with the average for all manufacturers and internationally.