New era in chain markets: 1 kilometer recommendation! — Latest news
Milliyet.com.tr/ The Competition Authority brings a new ‘distance’ rule for chain markets. So what is the purpose of this rule? Making a statement to milliyet.com.tr on the subject, the President of the Consumer Confederation Aydın Ağaoğlu used the following statements:
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“The regulation that the Competition Board wants to do is to prevent the establishment of market dominance in that region by opening branches close to each other of chain markets affiliated with the same capital in a certain neighborhood or street.
‘THE COMMON SALES POLICIES AND PRICES IMPLEMENTED’
However, at the end of October 2022, it was seen that the chain markets, which we know as discount markets, implemented common sales policies and prices by communicating with each other.
‘Consumers are content with the prices they see in the markets’
It is seen that the markets that seem to compete with each other on the same street are opened side by side or at a distance of 50-100 meters or mutually. This situation causes the consumer to be content with the prices they see in the markets while doing price research on basic food and necessities products.
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That is to say, when the consumer entering a discount market sees that the price of vegetables, fruits or toilet paper has increased, they immediately enter the other discount market nearby and compare the prices.
When he can’t see the reasonable price he wants there, he goes to another. However, since these are very close to each other, the consumer is content with the prices he has determined here. He cannot achieve the cheapness he desires.
RESTRICTION MUST BE IMPLEMENTED!
The regulation should also limit the opening of stores very close to each other in the same district or neighborhood.
Consumers who want to do price research go to the markets close to each other and compare the price. When he goes to nearby markets, he does not feel the need to do any further research.
If there was a distance between the markets, maybe they would examine prices from other sales points, but they do not feel the need to do this.
HOW DOES IT AFFECT COMPETITION?
It’s as if the small traders don’t exist anymore. Here, the recommendation of the Competition Board is that the same chain store should open stores very close to each other in the same neighborhood, thereby eliminating the competitive environment.
So there is a market here. There is another same market on the side street. There is a similar chain store opposite. Thus, the consumer cannot find a competitive environment that can compare prices.
WHAT SHOULD THE DISTANCE BE?
Those criteria have not yet been determined. My prediction is that it is at least 1 kilometer away. I am of the opinion that different chain stores should not be opened too close to each other. The reason behind this is the determination made by the Competition Board at the end of October 2022 that they acted jointly.
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-Retailers complain that the product to be sold at a discount cannot be found in the market. The Competition Board stated that the product announced as a discount should be in the store. What should the consumer do if he cannot find the discounted product?
This is a phenomenon that requires the consumer to complain to the advertising board due to misleading advertisements and advertisements. Consumers can file their complaints to the advertising board over the internet.”
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The Competition Authority in Turkey has proposed a new rule, called the ‘distance’ rule, for chain markets to prevent market dominance. The rule would prevent chain markets affiliated with the same capital from opening branches too close to each other in a particular neighborhood or street. The current situation, where chain markets compete with each other by opening stores side by side or within 50-100 meters of each other, results in consumers being content with the prices they see in the markets without conducting further price research. The lack of competition also makes it difficult for small traders to compete against the dominant chain markets. The distance criteria for the new rule have not yet been determined, but it is predicted to be at least 1 kilometer. The Competition Board has also stated that products announced as discounts must be available in the store, and consumers can complain to the advertising board for misleading advertisements.
