Factors Affecting Jjb Sports And Royal Mail Group Essay Example

decrease in investor confidence, the number of stores was reduced to 430 according to the managers. This decline is depicted in the annual reports that recorded a decrease of 50% in the chain's value. Sales also experienced a drop of 3.4%, with a gross margin of 0.

Despite JJB Sports experiencing a 5% decline, a 2006 report from Harris Associates Investment Trust revealed that their market share had increased by 27% due to price fixing from main competitor Sportsworld. The latter lost market share and the right to sell Nike and Adidas products. The UK government has since introduced regulations and policies through the Office of Fair Trade (OFT), a government agency mandated by Acts of Parliament to safeguard business and consumer interests via the Competition Act, Enterprise Act, Regulation of Investigatory Process Act (RIPA) and Consumer Regulation Enforcement Division (CRED). The OFT conducts market research and advises on policies for fair trade. Consequently, the government has established various policies that may impact consumers and retail businesses, including JJB Sports.

The 2004 OFT issue on fair trading outlined various policies to be implemented in 2005. These included reforms pertaining to the Competition Act, such as those regarding extended warranties (EW), and also the Distance Selling Regulations (DSRs) and National Competition Authorities, concerning the European Commission on Modernisation Regulation 1/2003. The EW reforms required retailers to display prices of goods sold under EW, and to provide customers with information regarding their statutory rights, cancellation of rights, and warranties.

Companies must meet several requirements regarding the cancellation of extended warranties. They must notify customers 45 days prior to the end of their EW, giving them the option to purchase

the product at the same terms. Discounts should be offered for 30 days and buyers must be informed if their EW includes protection for business insolvency.

The Distance Selling Regulation (DSRs) offers protection for consumers who make purchases without physically meeting the seller via means such as telephone, fax, email, internet or interactive television. The Office of Fair Trade has been granted the authority to investigate, conduct surveillance and use human intelligence systems to obtain data on business cartels who conduct themselves in an unprofessional manner against the law, including those who engage in price fixing. This power was demonstrated by the prosecution of JJB Sports for the price fixing of Manchester United and England t-shirts under the Regulation of Investigatory Powers Act (2000). The Enterprise Act provides the OFT with powers to investigate individuals involved in dishonesty, bid rigging, price fixing and the setting of artificial product and supply levels. Cartels who engage in such behavior are known to have negative effects on both the economy and buyers due to their high prices.

The government has implemented strict measures to ensure businesses comply with regulations and promote fair competition. These measures include prioritizing competition over regulation, providing guidance through publications and seminars, and enhancing communication and law enforcement strategies. Additionally, consumer codes have been established to elevate business standards and educate traders and consumers on their rights and responsibilities. The OFT will use licensing under the Consumer Credit Act to modify market behavior in retail businesses, similar to its success in the debt management industry. By conducting consumer research, the OFT gains insight into market dynamics and advises the government accordingly.

The government has implemented structural reforms

in the retail industry to comply with the European Commission regulation on Modernisation 1/2003 Article 82 and Article 82. This involves changes to the Competition Act of 1998 through secondary legislation. Although retail traders have expressed concerns, the OFT has reassured them that it is working on finding flexibility in flaws caused by the European Commission Competition Act. The EC regulation applies to all European member states, including the National Competition Authorities (NCAs) of the UK, which must address the impact of the article on retail businesses. The NCAs will apply EC Article 81 and Article 82 to domestic competition, decisions, and abusive conduct. Exemptions from the restrictive regulation for businesses to notify the regulator are permitted under Article 81(3), and equal treatment of agreements is mandated in all states according to natural competition laws under Article 81.

It is important for NCAs to cooperate with competitors to ensure fair trade by exchanging information and conducting investigations. Criminal offenses like internet mail order scams and telemarketing laundering have increased, similar to the case of price fixing by cartels in the retail business. For instance, Canadian lottery scams defrauded United Kingdom nationals of approximately ?15 million annually, with 15 call centers being caught. To combat these activities, the government is partnering with other countries through the International Consumer Protection and Enforcement Network (ICPEN) to promote a cooperative approach against cross-border fraud, sharing of information, and consumer education on the dangers of such schemes.

The ICPEN operates informally by committing to a memorandum of understanding that emphasizes sharing information, protecting consumers, enforcing laws, addressing breaches, facilitating remedies, and promoting wider participation. This approach highlights the future trends

in retail business in both the UK and the European Union member states. The beneficial impact is the exception principle, which is superior to the current inefficient and burdensome system. The previous legal restrictions led to increased compliance costs and risks. Additionally, NCAs are responsible for enforcing EC law under Article 81(3), while courts apply Section 9 of the Competition Act to uphold the law with exceptions. OFT has the authority to decide how to apply both EC and domestic competition law based on business conduct and clarity in chapters 1 or 2 of the Act, as outlined in Articles 81 and 82.

According to EC law, the NCAs can enforce more stringent regulations on domestic commerce that are not contrary to Article 82.