Myths about Grocery Retailers and their Retail Buying Groups (RBG)

Retail buying groups (RBGs) in the European grocery sector have sparked intense debate among retailers, brand owners, and regulators. These alliances enable member retailers to consolidate purchasing power and negotiate better terms with suppliers, aiming to enhance price competitiveness. However, RBGs' rising influence has generated controversy, with stakeholders promoting competing narratives. Key concerns include whether RBGs primarily benefit member retailers, reduce prices for consumers, or stifle brand owners’ innovation by limiting revenues. This paper examines and debunks common myths about RBGs, addressing claims that grocery retailers hold inherent advantages over brand owners, RBGs excessively consolidate power, and their primary goal is to capture supplier profits. It explores whether cost savings are systematically passed on to consumers and assesses accusations that RBGs exploit small suppliers and harm innovation. By analysing profitability, consumer value and innovation risks, the study sheds light on the complex dynamics of RBGs. It highlights how vested interests and negotiation biases often obscure objective understanding, aiming to foster a balanced perspective on the economic and political implications of RBGs in the grocery sector.