Band 6+: Many small local sshops are closing as they are unable to compete with large supermarket in the area. How does this effect local communities? How could this situation be improved ?

It appears that a lot of smaller shops suffer from not being able to stay in competition with big supermarkets that function in the same vicinity. This essay will look into the ways inhabitatns of certain areas are affected by this phenomena and suggest solution to this problem.

Since nowadays free economy is more prevalent than ever and inflation rates keep increasing, it becomes harder for small businesses to operate. Supermarkets, on the other hand, flourish in such conditions because of the wider range of options they can offer. As supermarkets gain more power in the market they often gatekeep suppliers, contracts, opportunities from their competitors, in this case local shops. For example, looking at the research that has been carried out in Harvard, only quarter of local shops managed to uphold their position, while the remaining proportion had no choice but to close. Having only a few big shopping centrers around them make locals dependent on the supermarkets, as they become their sole place to shop at, and sometimes the supermarkets abuse their dominant position and increase prices to an absurd degree.

One way to tackle this issue could be government’s interference. As the unfair treatment of customers appears because of the control supermarkets’ managers experience, an effective tactic would be having government or provincial authority regulating and regularly checking if the prices exceed the price ceiling. At the same time, legal enforcements such as competiton law could be applied to those who attempt to disbalance fair competition among businesses. These actions would insure that buyer won’t have to overpay for any products and benefit local shops. In one of Italian municipals similar legal actions are taken daily and locals report that their shopping errands improved in quality.

In conclusion, while supermarkets pose a serious thread to smaller shops and tend to be detrumental for local civillians’ finances, it is possible to ensure better competition between the two and enchance the situation for buyers.