ARE we being ripped off at the supermarket?

Apparently we are, according to the report today by the Office of Fair Trading claiming that the big four supermarket groups use their immense buying power to force discounts out of their suppliers but don't pass them on to customers.

Their profit margins, it claims, are roughly three times higher than those in France, Germany, Italy and Spain.

And the report's author, university professor Paul Dobson, draws on the experience of many UK overseas holidaymakers to underline this.

"Customers in Britain may feel they are ripped off by supermarkets when they go abroad and observe much lower prices," he says. Supporting this belief is the view that the four major supermarket companies - Tesco, Sainsbury, Asda and Safeway - have an increasing and uncompetitive stranglehold on shoppers, with 42 per cent of the UK grocery market and control of 80 per cent of that for food.

But if this carve-up-cum-rip-off was as clear cut as the report suggests and consumer awareness of it is heightened by the comparisons shoppers can make on their holidays abroad, why has the consequential consumer backlash not occurred?

For all the big four's dominance, there is, after all, still plenty of choice elsewhere, particularly among the no-frills, budget grocery chains.

But the major chains' customers remain remarkably loyal, considering the claims that they are being overcharged and that they know it.

Could it be that most customers are content, prefer the convenience of one-stop shopping and, on prices, are observant of trends that suggest they are actually getting value for money - such as that showing shop prices rising by only 1.4 per cent in the past 12 months, compared with a 3.3 rise in the cost of living overall.

This OFT report, it would seem, draws on suspicions of a rip-off, without delivering full proof.

But it does suggest the need for further inquiry.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.