Retail Framework 2010.

STATES OF JERSEY

RETAIL FRAMEWORK 2010

Presented to the States on 23rd March 2010 by the Minister for Economic Development

STATES GREFFE

2010   Price code: D  R.33

REPORT

A revised framework for managing retail development in Jersey

1. Introduction

This paper outlines the position of the Minister for Economic Development in respect of the development of the retail sector in Jersey. The Minister has considered the views of Islanders and businesses and has sought updated economic advice. Appended to  this  paper  is  a  detailed  economic  analysis  from  the  States  Economic  Advisor particularly focussing on the issue of concentration in the food retail sector. The economic advice draws on a range of research on the Jersey retail sector and work carried out by other jurisdictions. The policy itself is informed by work conducted by the Economic Development Department ("EDD") and the Statistics Unit, as well as meetings  with  the  relevant  government  departments  and  the  government  policy framework.

2. Policy

1. Policy Summary

The retail sector (including wholesale) is the largest part of the private sector outside finance in the Jersey economy in terms of GVA and employment. For an economy aiming to maximise productivity and economic growth, vigorous competition is a vital ingredient for success. Greater competition in the retail sector has the potential to lower  prices  and  costs  through  increased  efficiency.  Lower  inflation  is  generally conducive to economic growth and is also good for the Island's export industries including finance, tourism and agriculture. Competition in markets is about ensuring that the economy's resources are put to their best use – something that is critical for all economies but even more so for an Island economy with limited resources at its disposal.

The States should not intervene to prevent change in the retail market, and should avoid restricting entry by new firms into the retail sector, whether they come from outside or within the Island, for the following reasons –

• Market structure, particularly in food retail, is not conducive to maximising productivity in the Island.
• There are serious concerns about the effects of concentration when there are only 2 players in a market.
• Consumers have clearly indicated that they want more competition, lower prices and more choice.
• Many retailers are not against additional competition if it is on a level playing- field.
• Competition is a catalyst for change and modernisation.

• Research  has  indicated  that  the  effects  of  increased  competition  on  local businesses are generally not as severe as has been feared in the past.

As  part  of  the  Island  Plan  revision  process,  consideration  has  been  given  to  the guidelines on retail development to try to ensure that they do not unnecessarily impede market forces and the required development of the retail sector (see section 6).

The most desirable outcome, in terms of increased competition and associated benefit to consumers, as well as the most desirable in the minds of the public of Jersey, would be the entry of an additional large food retail competitor into the local retail market.

Unlike the previous retail policies, neither this document nor the associated economic advice attempt to determine the exact appropriate level of retail space in the Island.

2. Previous Policies

The original Retail Framework sought to –

"Limit the scope for additional net floor space to the broad levels set out below and assess the impact of this new space before allowing significant further entry (unless the market structure changes):

• 40-50,000 sq ft for convenience (supermarkets and food stores)
• 40-50,000 sq ft  for  bulky  comparison  (DIY,  electrical, furniture/carpets)
• 15-25,000 for clothing/footwear
• 20-30,000  for  other  non  bulky  comparison  (books,  toys,  sports. leisure)".

This established the EDD's position on the matter, but was wrongly identified in some cases as a target figure rather than a maximum, leading to confusion about the Retail Framework's ultimate objective.

Additionally, the Minister now considers that there is no need to establish desired or maximum levels of retail space, as this is ultimately a matter for the market. If the appropriate conditions for effective competition are established, then the market will resolve any issues of over-concentration.

Accordingly, this document seeks to identify such conditions rather than recommend or limit any specific increases in floor space.

3. The Retail Sector

1. General composition

The wholesale and retail sector provides £259 million to the Island's GVA per year1, the second largest private sector contribution towards GVA (with financial services providing the largest). This contribution in equivalent to nearly 7% of the economy overall.  It  employs  over  7,300  full-time  employees,  approximately  15%  of  those employed in the Island, meaning that it is also the largest employer outside the finance

sector2.

The average employee in this sector earns £430 per week3, and contributes £32,000 annually to the Island's GVA4. These are low in relative terms, both being the 3rd lowest  of  the  Island's  10  measured  sectors.  Only  agriculture  and  the  hospitality industry generate lower returns.

Despite representing only 7% of the economy, the wholesale and retail sector employs 1,200 non-local staff, making it the third largest employer of non-locals.

It is therefore a large, but relatively low value sector.

The figures above refer to the direct contributions of the sector and do not include the supply/service linkages to the rest of the economy. The sector is clearly an important component  of  the  Jersey  economy,  and  if  the  Island  is  to  achieve  its  economic objectives, then the wholesale and retail sector must function efficiently.

2. Market Concentration

The  grocery  retail  sector in Jersey  is  largely  comprised  of  2  supermarket  chains (Sandpiper which owns and operates 3 Checkers' supermarkets and the Marks & Spencer'  food  franchise;  and  the  Channel  Islands  Co-operative  which  owns  and operates  2  Co-op  Grande  Marchés')  and  numerous  convenience  stores  (either independent or belonging to Sandpiper, Co-op, or the Spar' chain). In addition, there are a number of specialist retailers operating out of St. Helier 's Central Market, and farm-shops in out-of-town locations.5

Concerns  have  been  expressed  by  the  Jersey  Competition  Regulatory  Authority (JCRA) and the States Economic Advisor about the level of concentration' in the local retail market (see section 5). Concentration occurs when there are only a small number of suppliers in a market – in this case, 2 supermarket operators and one major facia group, Spar, (plus independents) for Jersey's convenience retail sector.

1 Statistics Unit, (December 2008), Jersey Economic Digest, States of Jersey, p.32 (provisional

figure).

2 Ibid. p34 (FTE, excluding one-person businesses).

3 Ibid. p36.

4 Ibid. p33 (£ at 2003 value).

5 Information from – JCRA, (March 2008), Economic Impact of New Entry in the Retail Sector

by a Large Supermarket Competitor, States of Jersey.

As detailed in the work of the States Economic Advisor, the local market is concentrated as, despite the presence of small retailers, there are only 2 multiple operators and this can lead to reduced consumer choice and higher prices to consumers.

4. Public opinion

The Economic Development Department has gathered a considerable body of evidence in respect of the public's opinion on the introduction of additional retail space in the Island. In particular, work has been carried out to assess the desire for an additional supermarket retailer.

At the request of the Economic Development Department, the Statistics Unit has independently conducted a survey[6] which has indicated that –

• 84% of Islanders are in favour of having a third supermarket.
• 61% feel that the current range of supermarket operators is poor or very poor, only 15% consider it good or very good.
• Only a third are concerned (and half are not concerned) about the impact on small shops.
• Only 15% are concerned (against 71% not concerned) about the impact on supermarkets they currently use.
• Of those in favour of a third supermarket, three quarters would like a general British operator.

The Statistics Unit considers that the distribution of the survey and the extremely high response rate ensures that the conclusions robustly represent the views of Island residents'.[7]

It is clear from this response that the public in Jersey have a specific favoured outcome – the introduction of an additional large food retail competitor into the Island's retail market, with a preference for a UK operator.

5. The Jersey Competition Regulatory Authority (JCRA)

1. JCRA Study – the price of food in Jersey

Prior to the publication of the previous Retail Framework in 2006, the (then) Economic Development Committee requested the assistance of the JCRA "in seeking to ascertain the reasons why prices of certain food products in Jersey appear to be significantly higher than prices for equivalent products in the UK".[8] The JCRA reported in October 2005, and their primary conclusions were –

1. The majority of food products surveyed are more expensive in Jersey than in the UK, with some products being significantly higher priced. Historic below- cost  pricing  for  some  products  in the  UK,  however,  complicates  price comparisons.
2. The  price  differential  for  food  between  Jersey  and  the  UK  probably  is attributable to several factors.
3. One  contributing  factor  is  the  higher  cost  of  doing  business  in Jersey compared to the UK. The cost of labour appears significantly more expensive in Jersey, as much as 40% higher than in the UK. Other increased costs such as transport, are also likely to be factors. The effect of increased costs on retail prices multiply across the food supply chain, to the extent that activities are carried on in Jersey.

4  A  second  contributing  factor  consists  of  inefficiency  and  lack  of  scale

economies in Jersey that appear to exist in several levels of the food supply chain. Farming is expensive in Jersey compared to the UK. Jersey's food producers and retailers are very small scale and probably do not achieve economies of scale comparable to UK equivalents.

5. Another likely contributing factor is the high market concentration levels in Jersey compared to the UK in markets for food production, distribution and retail sale. High levels of market concentrations can result in less competition and higher prices, based on actions by competitors that may or may not violate competition law.
6. Differences in consumer purchasing habits may exist in Jersey compared to the UK, and if so, they also could contribute to price differentials.

The  JCRA  report  contains  a  comprehensive  discussion  of  the  factors  that  could contribute to the comparatively high cost of food in Jersey. It supports Conclusion 5 by noting that Jersey has high levels of concentration' in milk-processing, shipping and food retail9.

The JCRA go on to state that the "UK's Competition Commission concluded that consumer choice in food retailing is adequately safeguarded when three or more supermarkets compete in a particular locality".10 Also that the Australian Competition and Consumer Commission has stated even more strongly that a "reduction from three large firms to two makes the emergence of cooperative behaviour almost inevitable even if the firms do not consciously seek to cooperate".11

9 JCRA, 2005, Comparison of Food Price s in Jersey and the United Kingdom, p.14.

10 UK Competition Commission, 2000, Supermarkets; A report on the supply of groceries from

multiple stores in the United Kingdom, p.26 reproduced in JCRA, 2005, Comparison of Food Price s in Jersey and the United Kingdom, p.14.

11 Australian Competition Commission, May 1996, Application for Authorisation: Wattyl/

Courtaulds/Taubmans/Pinchin Johnson , p.65, reproduced in JCRA, 2005, Comparison of Food Price s in Jersey and the United Kingdom, p.15.

2. JCRA Study – the effects of an additional multiple entrant –

Following the publication of the original Retail Framework, and the subsequent production by the Economic Affairs Scrutiny Panel of the Retail Strategy (Interim) Review (S.R.9/2007) in April 2007, the Minister again sought advice from the JCRA, on "the economic impact of new entry into the retail sector by a large supermarket competitor in terms of the impact on consumer welfare, productive efficiency and the Jersey economy overall".[9]

The JCRA, in its summary of the full report, concludes that –

After considering the evidence and taking into account comments made in submissions, the JCRA, on balance, advises the Minister that the economic impact of new entry into the retail sector by a large supermarket competitor would be economically beneficial in terms of increasing-

• consumer welfare;
• the productive efficiency of existing retailers; and
• the Jersey economy overall.'[10]

In its analysis of responses received from interested parties, the JCRA noted that some responses go "beyond the economic and commercial perspective"[11] and deal with perceived negative social effects. The JCRA responded –

"However, the JCRA does note that, should it conclude in this inquiry that the entry of a third supermarket is economically beneficial [as later it did], then rejecting entry on the basis of a hypothetical and subjective adverse social impact will come at a cost to consumer welfare and the economy generally."[12]

The Minister for Economic Development fully accepted the JCRA's advice at the time of publication. No evidence in the intervening period has emerged to alter the position in respect of this advice.

The potential social effects of the entry of a new large food retail competitor are addressed in the advice of the States Economic Advisor (see Appendix, sections 11, 12, 75–84).

3. JCRA Role

Ultimately, Jersey is not significantly under-supplied with retail floor space, but the current economic advice indicates that this floor space is concentrated amongst too few large competitors.

Accordingly, the Minister will continue to work with the JCRA to resolve the current issues of excessive market concentration in the food retail sector.

6. Island Plan

While the weight of evidence points to a new large food retail competitor delivering significant economic benefits, Jersey's particular characteristics could inhibit the development is such an operator. The most significant challenge in addressing the market structure is the lack of suitable sites for the development of modern supermarkets, a land-use issue which is ultimately controlled by the Island Plan.

During the development of the Island Plan 2010, the Economic Development Department engaged with the Planning and Environment Department ("PED") to try to establish a method by which a suitable site for a new large food retail operator could be selected. PED agreed to incorporate into the revised Island Plan a sequential test', to establish the most suitable site for the construction of any potential supermarket development by identifying suitable town centre locations, and, if no such sites exist, to identify sites in other locations.

It would be desirable from EDD's perspective if the stages of the sequential test included the options of within town but outside the town centre', outside town but within the Built-Up Area', edge of Built-Up Area' (potentially encompassing brownfield sites) and finally, if no other suitable location can be found, outside the Built-Up Area'. It is understood that, at the latter stages of the sequential test, there will be a higher burden of proof required related to the benefit of the development to the Island versus the cost of increased development, or some mechanism such as a public planning inquiry in relation to this.

EDD has expressed its concerns about the feasibility of resolving market concentration issues while operating within an Island Plan which is based on an explicitly stated understanding that the Island does not require additional food retail development. The States Economic Advisor has also noted that PED's preferred measurement method of floor space planning is not able to deal with issues such as market structure or levels of competition (this position is explored in the Appendix, sections 54–60).

The EDD hopes to continue discussions with the PED in order to find a mutually satisfactory method of removing barriers to entry to the local food retail market.

7. Other considerations

Notwithstanding the benefits to consumers of potential downward pressure on food prices, with the associated possible benefits of economic growth and retail efficiency, concerns have been raised during discussions of this issue with the public and other stakeholders.

1. Effect on local businesses

An oft-cited danger of introducing an additional supermarket operator is a potentially detrimental effect on local businesses. This is often accompanied by concerns that the entrant will seek to obtain market dominance by eliminating competition through under-pricing, before maximising profits as a monopoly.

The States Economic Advisor has analysed the potential impact on local shops, using the most recent data from the UK and other jurisdictions, and his results are detailed in

the Appendix, sections 30–41. He has also addressed the concern that Jersey is too small to accommodate a third supermarket operator, with reference to supermarket operating densities elsewhere (Appendix, sections 48–50).

2. Effect on the local environment

In the event of a new competitor constructing a large food retail development in the Island, the Minister hopes to minimise any environmental consequences by working with the PED to ensure that any site selected by the new operator is suitable (See section 6, above).

8. Wider policy framework

8.1  States Strategic Plan – Economic objectives

The economic objectives of Jersey are detailed in both the Economic Growth Plan and the States Strategic Plan.

In April 2005, the States approved the Economic Growth Plan (EGP), which examined how best to use Jersey's assets to ensure future prosperity.

The EGP is quite clear in terms of competition policy –

"Ensuring there is vigorous competition between firms is also critical to maximising productivity and economic growth. Competition encourages firms to innovate by improving efficiency and reducing slack, puts downward pressure on costs and improves the organisation of production. The end result is a better deal for consumers."[6]

It also specifically addresses the issue of local protectionism –

"The threat of potential competition from abroad is also an important factor, because this too can encourage incumbent firms to improve efficiency and to innovate The  challenge  is  to  identify  where  there  are  barriers  to  open competition and where there is no reason for the government to allow them to remain they should be removed."[7]

The States Strategic Plan (2009–2014) also encourages an increase in the efficiency of the Island's economy and the limitation of possible cost-inflation. The relevant policies are –

Support the Island community through the economic downturn (Why we must do this) –

We need to protect the most vulnerable from the worst impacts of the downturn.

This policy will meet this requirement by encouraging competition that will maintain downward pressure on prices, which will assist the vulnerable (in this case low-

income families) to maintain their quality of life through access to greater consumer choice.

Support the Island community through the economic downturn (What we must do) –

Identify policy options to stimulate the economy and consider what we can do to support the people most affected (p.8).

Increased competition in the retail sector may have the dual effects of benefiting low- income families, as detailed above, and improving the condition of the economy by removing resources from a low-return (low GVA) sector of the economy and making them available to higher value sectors. The secondary effect of lowering consumer prices would be to leave more money in Islanders' pockets, which would allow more discretionary spend, benefiting the economy.

Support the Island community through the economic downturn (What we must do) –

Identify policy options to stimulate the economy and consider making the States more responsive in areas such as Planning and the Regulations of Undertakings and Development Law (p.8).

The above strategic aim is mirrored in this policy, which intends to maximise benefit to the Island by ensuring that effective competition can operate to ensure economic efficiency and lower consumer prices.

In addition to the specific aims, the States Strategic Plan also contains key indicators', which are a measure of success. This policy seeks to assist in meeting two of the criteria –

[To meet the] full range of economic indicators set out under priority 2 [which includes keeping the local Retail Price Index as low as possible] (p.7)

[To] work to maintain low inflation in the Island (p.9).

9. Conclusion

The policy of the Economic Development Department has been to ensure that there is sufficient effective competition to maintain downward pressure on prices. Not only will competition potentially increase economic growth in the Island, but it could also drive increases in efficiency. Competition also serves a social function, as it permits low-income families to have access to everyday goods at the lowest possible price.

This policy has traditionally been tempered by a desire to ensure any possible detrimental effects on local businesses are minimised, and accordingly the States Economic Advisor has carried out an analysis of those effects, based on the latest available data.

The Minister believes that an additional large food store operator should not be prevented, and that any application should be treated on a level playing-field with other existing operators in terms of Regulation of Undertakings and planning policy.

An effective sequential test would be necessary to determine the most suitable location for such development.

9.1  EDD policy aims

The key policy aims are –

There  should  be  no  barrier  in  the  Island  Plan  to  the  consideration  of applications  by  new  large  food  store  operators.  The  Minister  supports  a sequential test' to protect Island Planning objectives and to consider whether there is an appropriate site for any potential entrant.

In order to avoid establishing an uneven playing-field', all applications for retail developments should be treated in a similar manner, and no special concessions should be granted to arriving operators.

In  every  case,  an  application  should  be  treated  on  its  merits,  balancing  social environmental and economic issues.

In addition to the aims as above, EDD will also –

Investigate  with  the  JCRA  what  powers  it  would  require  to  address competition and issues of market structure in the retail sector.

Minister for Economic Development, March 2010.

ENDNOTES

Economic  Development  Department,  2006,  A  Framework  for  Managing  the Development of the Retail Sector in Jersey'

Jersey Competition Regulatory Authority, October 2005,  Comparison of Food Price s in Jersey and the United Kingdom (JCRA Response to a Request Received from the  Economic  Development  Committee  under  Article 6(4)  of  the  Competition Regulatory Authority (Jersey) Law 2001)'

Jersey Competition Regulatory Authority, March 2008, Economic Impact of New Entry in the Retail Sector by a Large Supermarket Competitor (Advice to the Minister for  Economic  Development  under  Article 6(4)  of  the  Competition  Regulatory Authority (Jersey) Law 2001)' (Public Version)

Statistics Unit, December 2008, A Third Supermarket operator in Jersey? (Survey Report)

Statistics Unit, December 2008, Jersey Economic Digest

ECONOMIC ADVICE FOR UPDATING THE RETAIL FRAMEWORK Summary

1. This  paper  provides  further  economic  advice  for  updating  the  Economic Development Department's Retail Framework first published in June 2006 and in particular with reference to the potential impact of entry of a third supermarket  operator.  It  has  been  updated  in response  to a  request  from Economic  Development  to  take  into  account  all  the  new  information contained in the numerous reports that have been published on the subject both in the Island and elsewhere since the Retail Framework was published.
2. As the previous Retail Framework highlighted, the retail sector (including wholesale) is one of the largest sectors in the Jersey economy, employing 15% of the workforce; equivalent to 8,500 people. It is therefore critical that such a large sector of the economy contributes to the economic objectives set out in the States Strategic Plan 2009–14.
3. The supermarket sector in Jersey is highly concentrated, with both players (Sandpiper and Co-op) having large market shares. The evidence is that such concentrated  markets  weaken  competition  and  allow  a  grocery  retailer  to worsen their retail offer and earn higher profit margins. In Jersey there is evidence that prices for many food products are 15–20% higher than those in the UK for equivalent products. Entry by a large French or British operator would reduce concentration and bring economies of scale that currently do not exist in the supermarket sector in Jersey.
4. Entry of a third supermarket would also be conducive to achieving the States' wider  economic  objectives.  Competition  in the  supermarket  sector  could create  space  for  small  businesses  to grow;  and  larger  retailers  can  bring economies of scale and new technology that lead to improved efficiency. The States'  economic  objectives  centre  on  greater  efficiency  and  improved productivity across the economy. Given the size of the retail sector in Jersey, these must be the objectives of the retail sector too. The analysis in this paper shows that important ingredients in meeting these objectives will be ensuring that retail markets are competitive, removing barriers to entry and preventing concentrated markets.
5. A potential downside of entry of another supermarket operator is the impact on existing retailers and small shops in particular. However, an objective assessment of all the evidence from the experience in the UK is that the impact  on  small  shops  is not  as  great  as  some  have  made  out.  In  fact, supermarket entry in the UK appears to have had no identifiable impact on a range  of  small  independent  stores.  In  addition,  in Jersey  only  a  third  of Islanders are concerned (and 50% are not concerned) that smaller shops might close if Jersey has a third supermarket operator. If entry of a new supermarket entailed the retailer occupying an edge-of-centre store it could actually help to maintain and enhance the town centre and the small shops that exist there.
6. Experience in Jersey and the evidence from elsewhere is that Jersey is large enough to support competition between 3 or more supermarket operators.

7. While  entry  by  a  discount  operator  such  as  Lidl  or  Aldi  should  not  be discouraged, they should not be seen as substitutes for competition between larger supermarkets. The evidence is that such stores, and particularly entry of the  first  ones,  do  not  provide  significant  competition  for  existing supermarkets.
8. While  retail  capacity  studies  may  inform  land-use  planning,  they  are  not sufficient for informing wider policy and should not be given much weight. They are partial and there is scope for a wide margin of error. If entry of new retailers is constrained simply because such studies show there is a risk of trade diversion, this will reinforce the market power of existing retailers and lead to higher prices than would otherwise have been the case.
9. There is a wide body of opinion that as consumers are less well-organised than other  interest  groups,  their  views  should  be  properly  canvassed  and instrumental in determining retail policy. Until recently, it could have been argued  that  in Jersey,  consumer  views  were  not  being  heard.  A  survey undertaken independently by the States of Jersey Statistics Unit at the end of last year has given a voice to the Jersey consumer which clearly indicates that –

• 84% of Islanders are in favour of having a third supermarket.
• Only a third are concerned (and half are not concerned) about the impact on small shops.
• Only 15% are concerned (71% are not concerned) about the impact on supermarkets they currently use.
• Of those in favour of a third supermarket, three-quarters would like a general British operator.

10. The previous  Retail  Framework  suggested  floor  space  guidelines  for  new retail space as second-best to greater competition. Such an approach could place a cap on new floor space which would act as a barrier to entry and restrict competition. The preferred approach should be to allow entry on a level playing-field basis, and that entrants taking large amounts of floor space be subject to an economic impact assessment.
11. It is important that economic advice is balanced with social and environmental factors.  However,  an  initial  consideration  of  the  objectives  of  social  and environmental policy suggests that there is little in principle to suggest that additional competition in the supermarket sector would work against these objectives. In fact, if managed in the right manner, such entry could work with social and environmental policy as well as economic policy. It could provide a good  example  of  demonstrating  how  economic  and  environmental  policy work together as required by the Strategic Plan. Nonetheless, the social and environmental consequences of a particular proposal should be reviewed on a case-by-case basis to ensure that the social and environmental consequences are fully understood.

Recommendation

12. Entry  of  a  third  supermarket  operator  in Jersey  should  be  allowed  and potential  barriers to entry  removed.  This  could  bring  valuable  benefits in terms of increased efficiency and productivity, consumer choice and lower prices than would otherwise have been the case. The majority of Islanders are not concerned about the impact on existing retailers. Additional competition in the supermarket sector would therefore support the key economic objectives in the States Strategic Plan, and is widely supported by Islanders. Entry of a new supermarket could be managed in such a way that it contributes to social and environmental objectives. For example, a new supermarket entrant taking an edge-of-town site could reduce the risks of impact on the town centre and help enhance it.
13. The policy approach should be to allow competition on a level playing-field basis, and that the States should not prevent entry of a third supermarket provided it isin line with planning policies. A level playing-field means that new entrants and existing players are treated in the same manner in terms of planning and RUDL. However, it will also mean that potential new entrants should  have  all  the  information  at  their  disposal  about  current  policy, particularly given the mixed messages they may have received in recent years as the public debate has progressed.
14. It will be important that the approach adopted is communicated properly to potential entrants so that itis clear to them that entry will not be prevented if a suitable site is found. Communicating policy to potential entrants will be an important role for the Economic Development Department (EDD).
15. EDD should also work with the Planning and Environment Department (P&E) to ensure that policy does not unnecessarily restrict competition and that it does not have unintended consequences. EDD should also work with P&E to ensure that planning policy is based on the most recent evidence, for example on the impact of competition on town centres. It will also be important to ensure that planning policy does not give too much weight to retail capacity studies.
16. It may well be that in a small Island economy with tight controls over land-use and population, barriers to entry in the supermarket sector still exist. EDD should give further consideration as to whether competition law could be updated and enhanced to help address these inherent problems. For example, weigh up the costs and benefits of break-up provisions and whether they should be available as a last resort.

Retail and the Jersey economy

17. As the previous Retail Framework highlighted, the retail sector (including wholesale) is the largest individual sector in the private sector outside finance in terms of GVA. It is equivalent in size to the whole of the public sector. It is also the largest employer outside of finance, employing 15% of the workforce, equivalent to 8,500 people.

18. If Jerseyisto be successful in achieving its economic objectives, then the retail sector must play its part. The States' Strategic Plan for 2009–2014 sets out its key economic objectives as –

1. Support the Island community through the economic downturn.
2. Maintain a strong, environmentally sustainable and diverse economy.

19. Objective (i) is largely about using the Stabilisation Fund to support jobs and businesses  in the  local  economy  through  the  downturn.  Entry  of  a  third supermarket could be consistent with this objective if it occurred in a timely manner.  It  would  initially  create  additional  jobs  and,  if  it  leads  to new development this would act as economic stimulus, but rather than taxpayers' money it would come from the investment of the supermarket involved. In the medium-term the impact would be in line with objective (ii).
20. One of the key requirements for objective (ii) is that "sustaining and growing Jersey's  economy  must  be  delivered  through  sound  public  finances  and increased productivity, not at the expense of excessive population growth or inflation". The Plan states that this means –

• Lay the foundations for a genuinely diverse economy.
• Further develop Jersey's careers, jobs and employment services to maximise opportunities for all Jersey residents.
• Continue work to diversify the economy, support new and existing businesses, attract low footprint/high value business from elsewhere and foster innovation.
• Work to maintain low inflation in the Island.
• Test economic growth plans for sustainability to ensure they do not diminish our natural capital.
• Show the world that economic and environmental success can work together.

21. The link  between  economic  growth,  environmental  sustainability  and diversification is productivity. Improved productivity means that we use the resources we have at our disposal more efficiently in terms of land use, people and  energy  and  thereby  fostering  economic  growth.  The drivers  of productivity are skills development, investment, innovation, enterprise and competition, all supported by macroeconomic stability.
22. Entry of a third supermarket should support all the drivers of productivity and therefore is consistent with the second economic objective of the Strategic Plan. This is because –

• The more competitive environment generated by the new entrant will encourage it and its competitors to invest in the development of the skills of their workforce.

• The entry of a new operator will bring with it additional investment and the competition it will bring will spur greater investment and innovation as firms compete to improve efficiency.
• The supermarket sector in Jersey is a highly concentrated market and entry  of  a  third  player  will  be  an  important  improvement  in competition.
• The extra competition will mean that prices will be lower than would otherwise have been the case and this will support low inflation and macroeconomic stability.

23. The dynamics of competition can be an important determinant of productivity growth.  Foster,  Haltiwanger  and  Krizan  (2002)  point  out  that  there  is a growing  body  of  empirical  literature  that  shows  a  substantial  fraction  of aggregate productivity growth is associated with the reallocation of resources from less productive to more productive firms. "Moreover, entry and exit of establishments play an important role in this reallocation". Their paper looks at the case of the US retail sector and concludes that "virtually all of the productivity growth in the US retail trade sector over the 1990s is accounted for  by  more  productive  entering  establishments  displacing  much  less productive exiting establishments".
24. Similar results are found by Baldwin and Gu in their study of the Canadian retail  sector.  They  consider  the  relationship  between  the  churn  of  firms (i.e. the competitive process) and productivity growth. They conclude that "most  of  the  productivity  growth  in the  Canadian  retail  sector  can  be attributed to firm turnover and the competitive process that shifts output and input  from  exiting  firms  and  contracting  incumbents  to more  productive entering firms and more productive growing incumbents". They also find that foreign  controlled  firms  make  a  disproportionately  large  contribution  to productivity growth.
25. Productivity improvements can also be brought about through a change in the structure of the economy. That is, if resources flow from low value added activity to higher value added activity economic growth will occur with the same amount of resources. This type of change in the economy can also support diversification through the new higher value activity. The chart below shows that retail and wholesale activity is actually a low value added activity. Additional competition will bring greater efficiency and this means in the medium-term that any given level of consumer demand in the Island can be met with fewer resources (land and people) than would other wise have been the case.

Chart 1: GVA per FTE breakdown by sector

2007 GVA per FTE excluding sole traders, profits include rent

Profit Employment costs

200000 180000 160000

140000 120000 100000 80000 60000 40000 20000 0

es m ing ail e rs c m r act. ltur

servi s/water rt/co actu s e/ret gricu

al  /ga po uf sines A

Public adminConstructionns u

Financi Elect r tra Man her b Wholesal Hotels/rest/ba

he Ot

Ot

Source: States of Jersey Statistics Unit

26. The chart below shows that the retail and wholesale sector also employs a high number of non-locally qualified staff. In June 2009 it was the third largest employer of non-locals with 1,100 and the fourth largest in terms of the proportion of total staff.

Chart 2: Employment of non-locals by sector Number and as proportion of total employment, June 2009

Hotels/rest/bars  51%

Finance 9%

Wholesale/retail 13%

Agriculture 45%

Misc. business act. 17%

Educ/health/other 10%

Construction 10%

Manufacturing 13%

Other transport/comm 6%

IT 9%

Elect/gas/water 8%

0 500 1000 1500 2000 2500 3000 3500

Source: States of Jersey Statistics Unit

27. Charts 1 and 2 illustrate that entry of a third supermarket could also support productivity improvements and diversification. In the medium-term, a more efficient  retail  sector  will  require  fewer  people  to meet  a  given  level  of demand. This will reduce the dependence of the sector on non-local labour and facilitate productivity improvements and diversification. Growth can be supported  if  resources  diffuse  from  low  value  activity  into  higher  value activity. Average GVA/FTE in the Jersey economy is nearly double that of retail/wholesale, while GVA/FTE in the finance sector is five times that in retail/wholesale.
28. Planning  policy  also  needs  to be  conducive  to retail  productivity improvements. Lower UK retail productivity is seen as one of the contributing factors to the overall productivity gap' between the UK and US economies. Haskel and Sadun (2009) examine the reduction in UK retail productivity growth between 1997 and 2003. In 1996 there was a change in retail planning regulations in the UK which made it much harder for retailers to build large out-of-town stores and supported inner town development. This brought a marked change in the strategy of UK supermarket chains toward new stores from opening big box' stores out of town to focusing on new inner town small shops. Their results show that the fall in shop sizes is associated with lower productivity and they conclude that they suggest a robust correlation between average store size and retailers measured productivity'.
29. Similarly, evidence from the US Census of Retail Trade shows that large retailers operating chains are much more efficient than retailers operating a single store. The higher efficiency of the bigger retailers reflects economies of scale and use of better technology.
30. The next section considers the impact of large supermarkets on small shops and includes an objective review of the evidence base. It is important first to distinguish between the impact on the small business sector and that of small retailers. Sobel and Dean look at the case in the US where the impact of Wal- Mart has been hotly debated. They point out that itis important to look at the impact of Wal-Mart on the small business sector as a whole. The recycling of productive resources into new areas' is precisely the process through which economic  efficiency  can  increase.  They  also  point  out  that  the  money consumers  save  on  their  general  purchases  because  of  Wal-Mart's  lower prices is extra money that can be spent on other goods and services, some of which will be spent on goods and services produced by local small businesses. After examining a range of different measures of small business activity using different econometric techniques, they conclude that there is no evidence for the claim that Wal-Mart has shrunk the size of the small business sector in the US economy. They also find no evidence that good small businesses are replaced by worse small businesses that generate less income for their owners.
31. In a small Island economy like Jersey, the fact that supermarket entry could create opportunities for small businesses is particularly important. With a fixed  amount  of  land  and  labour  at  our  disposal,  improvements  in retail efficiency can create the space' for new small businesses to grow and expand. This is consistent with productivity growth and the Island's wider economic objectives.

The impact on small shops

32. An often cited concern about the entry of a third supermarket into the Jersey retail market is the decline in the number of small or independent shops in the UK over the last 30–40 years. The New Economics Foundation (NEF) has chronicled this decline inits reports: Ghost Town Britain and Ghost Town Britain II. They have illustrated that the decline in small shops has coincided with the rise in the number of supermarkets. However, correlation does not prove causation and there is no detailed research to support the hypothesized link. Friends of the Earth echo NEF's views in their briefing paper: Good neighbours? Community  impacts  of  supermarkets  but  also  provide  little evidence for their assertions.
33. The UK Competition Commission undertook more detailed analysis in its 2008 investigation and reached similar conclusions in terms of the trends in convenience store numbers. They observe the long-term decline in the number of specialist stores since the 1950s. However, they also find that the number of convenience stores has not declined in recent years and that this contradicts the widely-held belief that there is broad-based decline in the number of convenience stores in the UK, although this may reflect the trends experienced within the non-affiliated independent part of the convenience store sector. Their overall conclusion is that:

"The moderate growth in convenience store numbers, and the more significant growth in convenience store revenues that we observed, indicates that any distortion in competition between large grocery retailers  and  other  convenience  store  operators,  is  not  causing  a broad-based  decline  in  convenience  store  numbers  or  revenues, including the number or revenues of independent non-affiliated and symbol group convenience stores."

34. While  the  conclusions  of  the  Competition  Commission  on  the  long-term trends may not be that dissimilar to that of NEF, their conclusions about the impact of large grocery retailer store entry on smaller convenience stores and specialist stores are quite different. Over the period 1999 to 2006, entry by a new large grocery store was found on average to result in a reduction in the number of greengrocers and trading markets and an increase in the number of bakers in subsequent years. However, there were no systematic identifiable impacts  on  the  number  of  butchers,  convenience  stores,  delicatessens, fishmongers, health-food shops and off-licences.
35. It does not therefore follow that preventing entry of a large convenience store will protect smaller stores. The UK planning system was reformed in 1996 with the explicit aim to protect the vitality of town centres from the supposed draining effects of large out-of-town retail stores. Raffaella Sadun from the Centre for Economic Performance at the London School of Economics shows in her paper that these entry regulations have been associated with "greater employment declines in the independent stores they were meant to protect". The reason the author concludes is that when larger retail chains are prevented from entering a new area with a large store, they instead enter using a smaller in-town format which competes more directly with independent stores.

36. The House of Commons All-Parliamentary Small Shops Group reported in 2005 on High Street Britain: 2015. Their concern was that by 2015 many small shops across the UK will have ceased trading with few independent businesses  taking  their  place.  This  loss  could  damage  the  UK  socially, economically and environmentally. They made a string of recommendations on mergers and takeovers, regulation, codes of practice, requirement for local authorities to adopt a retail strategy and delegating greater decision-making power to people locally. Their report predated some of the key pieces of work outlined in this paper and in particular did not make any recommendation regarding preventing competition in concentrated markets like that in Jersey. In fact their concern was in the opposite direction:

"Growth in the number of sites occupied by the "Big Four" has resulted in the emergence of monopolies and duopolies in specific regions across the UK. Data from CACI illustrates that Tesco holds incredibly dominant market shares in Inverness (51%), Milton Keynes (50%), Twickenham (47%), Southall (47%) and Hemel Hempstead (46%). In such areas voting with their purse' is not always a viable option, due to the lack of alternative offers".

37. A paper which is often quoted is that from 1998 by the Department of the Environment, Transport and the Regions, entitled: The impact of large food stores  on  market  towns  and  district  centres.  The  study  comprises  of  a literature  review  of  earlier  research,  a  classification  of  market  towns  and district centres, a comprehensive survey of all the major food store operators and detailed studies of 9 market towns and district centres. The conclusions were that large food stores in edge-of-centre and out-of-centre locations can, and have had, a large adverse impact on the principal food retailers and the market share of the town centre convenience sector as a whole. The level, and consequences,  of  impact  will  vary  depending  on  the  particular  local circumstances of the centre concerned.
38. However,  the  conclusions  from  the  DETR  paper  need  to be  treated  with caution and have not been universally accepted. Professor Neil Wrigley from Southampton  University  in his  2006  paper  notes  3 things  about  the conclusions of the DETR report and in particular with the conclusions about the impact of edge-of-centre stores. First, the extremely limited empirical evidence from which they are derived. Second, that the subsequent view of many academics was that the report tended to considerable ambiguity in detail'. Thirdly, the over-generalized way the headline findings were reported and subsequently used.
39. Wrigley  believes  that  many  academics  have  suggested  that  the  only reasonable way to interpret the slender and ambiguous' DETR findings on edge-of-centre food stores isto conclude that they left in dispute' whether they  enhance  the  attractiveness  of  town  centres,  compete  with  existing facilities  or  are  completely  neutral.  Under  these  circumstances  Wrigley advises that attention should be paid to what the range of more recent studies have shown. His view is that there is now considerable academic agreement with the proposition that food retail provision – in particular the quality of supermarket provision – is vital to both the maintenance and enhancement of

the role of small towns, district centres and rural market towns in servicing their hinterlands'.

40. DEFRA,  in their  2006  paper  on  grocery  retailing,  note  that  the  retail revolution  since  the  1950s  which  has  encompassed  the  rise  of  multiple supermarkets and the decline of independent stores has been underpinned by socio-economic trends on the demand side –

• busy consumer lifestyles, with rising incomes;
• an increase in household numbers and women working;
• wider car ownership and the falling cost of car travel;
• wider ownership of fridge-freezers.

41. This illustrates well that there have been a whole host of factors combining to impact on the retail sector in the UK and to just focus on one issue – the increase in multiple supermarkets – is not looking at the full picture.

The need for extra competition

42. Another argument often put forward against the case for a third supermarket is that there is no need for additional competition in Jersey as there is already enough  competition  between  the  existing  players.  The  Competition Commission makes it clear inits report that where there are barriers to entry, the extent of local market concentration indicates the degree of competition between grocery retailers.
43. Market  concentration  is  determined  by  the  number  of  competitors  in the market  and  the  relative  size  of  those  competitors.  The Competition Commission  uses  2  distinct  measures  to assess  local  markets  in the  UK: retailers' share of groceries sales area as a proxy for share of sales and the number of competing fascias. A retailer that has a high market share is more likely to benefit from market power and the greater the number of fascias, the greater  the  number  of  alternatives  to which  consumers  can  switch.  The Commission  point  out  that  where  a  grocery  store  faces  zero,  one  or 2 competitors  (i.e.  monopoly,  duopoly  or  triopoly  stores)  and  the  retailer operating that store has a high market share, that retailer is likely to face little or no competitive constraint in that market.
44. In Jersey the large supermarket sector scores poorly in terms of both the number of competing operators – 2 (Sandpiper and Co-op) and the fact that they both have large market shares. The Competition Commission concludes that  consumers  are  adversely  affected  by  local  markets  being  highly concentrated. Weak competition in local markets allows a grocery retailer to worsen the store-specific retail offer and earn higher profit margins. Their estimate is that the effect of weak local competition is to allow larger grocery retailers to earn an additional 3% of annual profits each year.

45. In terms of the grocery sector (excluding smaller convenience stores) the Jersey market appears significantly more concentrated than the UK. As the chart  below  shows,  the  big  4 supermarkets  in the  UK  (Tesco,  Asda, Sainsbury's and Morrisons) account for nearly three-quarters of the market in the  UK.  In  Jersey  there  are  only  2  supermarket  operators –  Co-op  and Sandpiper – which means by definition their market share is actually 100%.

Chart 3: Supermarket market shares

% of grocery market excluding small stores

100 90 80 70 60 50 40 30

20 10 0

UK Big 4 Jersey 2

Source: DETR/TNS, Sandpiper/Co-op

46. Jersey not only has a high degree of concentration relative to the UK but also with the rest of Europe. The chart below shows that outside of the Nordic countries the UK has one of the most concentrated markets in the EU and Jersey has an even more concentrated market than the UK.

Chart 4: Share of largest retailers in grocery markets

% of share of top 3 firms

70 60 50 40 30

20 10 0

Source: DETR/IGD

47. A  recent  report  by  the  French  Competition  Authority –  Autorité  de  la concurrence – has examined why there are significant discrepancies between the price of consumer goods in mainland France and the overseas departments (DOM) – Guadeloupe, Martinique, Guyana and Reunion. One of their key findings  was  that  the  food  retail  sector  in the  DOM  is insufficiently competitive due to barriers to entry (including scarcity and high price of commercial real estate) and that the concentration level is high, with some groups  having  markets  shares  in excess  of  40%.  One  of  their recommendations isto revitalise competition by removing barriers to entry and by improving consumer information (as well as curbing anti-competitive practices).

Jersey is small

48. It might be thought that Jersey is too small to sustain competition between 3 supermarket  chains.  However,  the  evidence  again  from  the  Competition Commission  suggests  that  this  is  not  the  case.  They  recognise  that  the population in the catchment area will be an important determining factor as to whether a local market can support entry. The detailed analysis they undertake suggests that the minimum threshold for 3 competing stores is a population of 45,000 within a 20 minute drive-time.
49. The Commission also quotes a number of examples of towns in the UK where the population within a 20 minute drive-time is significantly less than the thresholds they set out for competition between 2 and 3 stores –

• Galashiels with a population 31,000 within a 20 minute drive-time supports 3 large stores.
• Fakenham has a population of 35,300 within a 20 minute drive-time and supports 2 large stores.
• Newtown has a population of 23,500 within a 20 minute drive-time and has 2 large stores.
• Berwick-upon-Tweed  with  a  population  of  24,500  in  a  20 minute drive-time supports 3 large stores with plans to open a fourth.

50. In Jersey, average household expenditure on food and non-alcoholic drinks is nearly  50%  greater  than  in the  UK  (see  chart  below)  and  therefore significantly greater than estimates of the difference in prices. This suggests that in Jersey a smaller number of people could be required to support any given number of stores relative to the case in the UK.

Chart 5: Household expenditure on food and non-alcoholic drinks average weekly household spending in 2004/5, £s

70 60 50 40 30 20

10 0

UK Jersey

Source: States of Jersey Statistics Unit

The impact of discount stores

51. The Competition Commission also examined the impact of entry of new stores on the revenue of incumbent stores. Where a revenue effect was identified this indicates that fascias may be a substitute for each other. Their analysis is summarised in the table below and shows that in most cases the entry by new Asda, Morrisons, Sainsbury's, Tesco and Waitrose stores has a negative effect on the revenue of the incumbent stores of these 5 names.
52. With respect to the discount chains such as Lidl and Aldi, there is very little evidence that entry by one of these supermarkets impacts on other grocery stores.

Table 1: Rank of significant entry effects on incumbent fascias

*The effect is statistically weak.

Source: Competition Commission

53. These findings are echoed to a certain degree by research on the operation of discounters and supermarkets in Germany by Cleeren et al. They study intra- and  inter-format  competition  between  discounters  and  supermarkets  in Germany.  Evidence  is found  of  intense  competition  within  both  the supermarket  and  discounter  format,  although  competition  is much  greater between  supermarkets.  They  state  "perhaps  most  importantly,  discounters only start to affect the profitability of conventional supermarkets from the third entrant onwards". The authors feel that this may explain why many retailers add a discount chain to their business – early entrants may benefit from the growth of the discount segment without cannibalising the profits of the more conventional supermarkets.

Capacity studies

54. The previous  Retail  Framework  highlighted  some  of  the  problems  with capacity studies. In particular, that they are based on estimates of expenditure and floor space which are used to calculate sales densities, which in turn are compared against benchmark densities. There is therefore scope for a wide margin of error in both the numerator and denominator in the sales density calculation and the comparator benchmark, which means overall there is a large margin of error in the overall capacity analysis.

55. The problems with such studies go beyond the scale of the margin of error. From  an  economic  perspective,  such  studies  are  partial  and  do  not  give consideration to material issues such as the structure of the market, efficiency, productivity, consumer choice and prices. For example, the same sales density figure could be delivered by 20 individual retailers or one monopolist, but they would be treated the same in a capacity study. Similarly, the sales could be charged at very high prices or very low prices or could be delivered using vastly different numbers of people, none of which would be distinguishable from a capacity study.
56. The DTZ study published last year is exactly this type of analysis and DTZ make it clear that it is "not a study of retail competition, on Jersey, and does not consider retail prices or the number of foodstore operators on the Island; since those are not material land use planning matters". For these reasons, while such analysis may be helpful in planning terms, it is not sufficient for informing policy for what is a large share of the Jersey economy.
57. DTZ do conclude that in quantitative terms there will be no need for any more large  food  stores  in the  Island  in addition  to the  existing  stores  for  the foreseeable  future,  but  that  there  is a  qualitative  need  for  about  2  deep discount  supermarkets.  From  an  economic  perspective  this  conclusion  is partial at best, as it fails to take account of wider issues in the large food stores in terms  of  the  structure of  the  market,  competition,  price  and  consumer choice.
58. The Competition Authority in Ireland have similar concerns over capacity studies. Their concern was that planning authorities required retail impact assessments which included an estimate of how much trade would be diverted from  existing  retail  centres  by  proposed  new  retail  development.  The Competition Authority points out that –

"The possibility of losing turnover to new retailers is what drives retailers to provide maximum value and service to consumers. This is the essence of competition. When this possibility is removed, as is the case  when  trade  diversion  explicitly  informs  the  decision  making process of planning authorities, the established retailer is given the market power to charge higher prices than might otherwise be the case."

59. The recommendation  was  that  planning  authorities  reduce  the  level  of importance  they  place  on  trade  diversion  when  considering  retail  impact assessments.
60. Economic research from around the world has shown that entry of new firms and exit of older firms is an important contributor to productivity growth. New firms can bring higher productivity, new investment and better organisation and compete with and replace firms that have lower productivity. Capacity studies pay little attention to this important dynamic driver of productivity and that policy based purely on such considerations will not be consistent with the wider economic policy objectives of improved productivity.

The Jersey consumer

61. As the Friends of the Earth point out: local people can find it hard to make their  voices  heard  or  their  wishes  taken  into  account'.  The All  Party Parliamentary  Small  Shops  Group  also  recommended  delegating  greater decision-making power to people locally. Similarly, NEF support the Local Communities Sustainability Bill in the UK on the grounds that it would "give local authorities, communities and citizens a powerful voice in planning their future".
62. The Competition Authority for Ireland also pointed out the importance of suitable consumer representation. They felt that the level of attention paid to consumer interests in the planning process may be insufficient. The Planning Authority is required to balance a variety of objectives and take into account a variety of views from different organised interests. Consumers were felt to typically  not  be  organised  and  therefore  at  a  disadvantage.  The recommendation was that local authorities should, when assessing future floor space requirements, survey consumers to accurately ascertain attitudes and preferences.
63. The Economic Development Department asked the States of Jersey Statistics Unit to independently undertake a survey of Jersey residents' attitudes and opinions  on  food  shopping  in the  Island.  1,200 Islanders  responded  (an extremely high response rate of 60%) and such a good sample means that we can be 95% confident that a result published for the overall population is within + 3% of the true population figure.
64. In  terms  of  attitudes to food  shopping  (see  Chart 6)  the  vast  majority  of Islanders  considered  quality  of  products,  value  for  money  and  choice  of products as very important. In contrast just over 40% and 20% of Islanders consider that availability of locally produced food and smaller shops near my home respectively as very important. Theis means that perhaps surprisingly just  less  than  half  felt  that  having  smaller  shops  near  my  home  for convenience' was not important and nearly a fifth thought that availability of locally produced food' was not important.

Chart 6: How important to you are the following with regard to food shopping in the Island?

% of respondents

Very important Fairly important Smaller shops near home

Not very important Not at all important

Availability of locally produced food

Customer servce Range of supermarket operators Choice of products

Value for money Quality of products

0% 20% 40% 60% 80% 100%

Source: States of Jersey Statistics Unit

65. The survey also gauged Islanders opinions on current food shopping in Jersey (see Chart 7) and they were most positive about the quality of products', availability of locally produced food' and smaller shops near my home for convenience'. However, only around half of residents rated them as good or better. The 2 factors with the most negative ratings were value for money' and range of supermarket operators'. About 50% of people considered value for money' currently to be poor/very poor and three fifths considered the current range of supermarkets to be poor or worse.

Chart 7: How do you rate current food shopping in the Island?

% of respondents

Very good Good Adequate Poor Very poor

Range of supermarket operators Value for money

Choice of products Customer service Smaller shops near home Availability local products Quality of products

0% 20% 40% 60% 80% 100%

Source: States of Jersey Statistics Unit

66. Questions in the survey also focused on Islanders' attitudes to having a third supermarket.  As  the  chart  below  shows,  71%  were  not  concerned  that supermarkets  they  currently  use  might  close.  Just  over  half  were  not concerned that less locally produced food might be available and half were not concerned that smaller shops might close.

Chart 8: Do you agree or disagree with the following statements about food shopping in Jersey, if Jersey has a third supermarket operator?

% respondents

Agree Neither Disagree

I am concerned that smaller shops might close

I am concerned that less locally produced food might be available

I am concerned that supermarkets I currently use might close

0% 20% 40% 60% 80% 100%