Another botched OFT investigation?

It came as no great surprise that the OFT investigation into the exclusive distribution arrangements in the school uniform market claimed that parents were £45m worse off as a result of these deals.

Like most OFT investigations, the cause and results will be unlikely to improve things for parents, students or schools and the only real beneficiaries are likely to be the supermarkets and high-street retailers, whose complaints prompted the investigation in the first place.

The simple fact is that almost all most schools who have exclusive or restrictive arrangements have embellished uniforms (some form of logos), which supermarkets and high-street retailers can’t or won’t supply. Their prices may be cheaper because they loss leader many school clothing lines, as a way of getting parents to spend more in store.

If and when the DfES change their guidelines for school governors about these arrangements, the net result will be that many of the small firms in this market will close and the major retailers will see a very small rise in their turnover. While we believe in the free market, it seems a dubious benefit to the competitiveness of UK, to potentially make several hundred people redundant because of a complaint from a few major retailers who already have 70% or more of this market. These retailers are unlikely to employ even a single extra person even if they eventually have 100% of the school uniform market.

It’s slightly ironic that two of the retailers who stand to benefit from the OFT’s decisions are Tesco and Sainsbury’s, who pitch their respective schools programmes (Active Kids, Tesco Sport and Computers for Schools) as major corporate social responsibility undertakings showing their support for education. In fact, these are actually nothing more than self-liquidating sales promotions, designed to build each company’s share of the non-food retail market - oh, and that would just coincidentally happen to include school uniforms.

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