Limit on size of retail outlets hinders competition - Prasifka

More than 120,000 shoppers from the Republic shopped in either Asda or Sainsbury’s in the North during the summer, the chairman of the Competition Authority William Prasifka said today.

Mr Prasifka said the fact that so many of the Republic's shoppers felt the need to shop at supermarkets that are not present south of the border showed the need to remove the caps on the size of retail outlets.

"If people are voting with their feet we have to reorientate our attention to the way that we do business here,"he said.

In a report earlier this year the authority called for the cap on the size of retail outlets to be lifted.

Mr Prasifka said Tesco entered the market here through its purchase of Quinnsworth in 1999 and had retail outlets ready from the beginning which players looking to enter the Republic's market do not have.

"If you look at a retail chain and you look at the economies of scale and scope which they generate by having a chain of stores, for them to come in effectively and profitably, it is not about opening one shop here and one shop there.

"It is about having the confidence that they could come in and duplicate their business model down here. Our retail planning system does create a formidable obstacle to them doing that," he said.

Mr Prasifka told the Oireachtas Committee on Enterprise, Trade and Employment the number of independent retailers in Ireland had declined from 12,000 in 1977 to 4,000 in 2006 even when there were policies in place to preserve them.

"If we are looking at policy instruments to support them, we have to face the facts that it has been a complete failure," he said.

He said the decline of the truly independent sector was "practically irreversible".