We suggest that at the outset of every enquiry the competition issues are clearly identified. Each step in the assessment of competition in retailing has to be considered in the context of the specific competition issue, and cannot be dealt with in isolation. Without this step, it is extremely difficult to appreciate the typical competition problems that retailing engenders. The first part of this descriptive analysis should focus on the characteristics of consumers in terms of the size and frequency of their purchase, shopping behaviour in terms of travel distance and, most importantly, the way in which consumers obtain information about prices, availability and quality of products. The second part should focus on the dimensions of competition between retailers in terms of price, geographical location, product selection, and the various types of retailer service.
Different retailers vary greatly in the types of retailer value-added which they provide.
In enquiries that relate to the retailing of a particular product group, it is therefore important to distinguish between relevant product markets and relevant retailer markets, and to define these separately. Usually this means that the relevant product markets should be defined first, and that then the relevant retailer market should be defined with respect to thetype of retailer. The fact that retailers compete in different ways and in different dimensions will sometimes mean that there is more than one possible definition of relevant retailer markets, depending on which aspects of retailers' behaviour are being analysed. Moreover, the nature of competition across a number of potential relevant retailer markets may sometimes so affect competition between retailers that the market definition needs to be adapted to serve the focus of the competition assessment. Our general conclusion is that market definition should never take place in a vacuum.