Monopoly ruling means cheaper mod cons

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The Independent Online
Books, televisions and hi-fis could all be much cheaper for the shopper in future, their prices driven by competitive forces unleashed yesterday.

The Government scrapped recommended retail prices on a range of electrical consumer goods, leading consumer groups to predict that prices would fall. Shoppers have already seen prices of televisions and videos drop by 15 per cent because of the strong pound.

Yesterday's critical report into electrical goods by the Monopolies and Mergers Commission said that suppliers have kept prices high by refusing to sell to stores which discount and by threatening to withdraw orders to shops which also wanted to drop prices.

Consumer groups believe that the Government's move will see a wider range of prices and more competition in the market. It also paves the way for massive warehouse stores to open. However, suppliers and dealers warned that margins were so small that prices might increase once RRPs went, and that the report was "fundamentally flawed".

Meanwhile, British booksellers are preparing for a price war in cyberspace, against American competitors who do not have a single store in the UK, nor any plans to open any.

Two of Britain's biggest chains, Dillons and Waterstones, are operating Internet Web sites each offering more than a million titles, some at a discount, in order to fend off rivals in the US.

The result is likely to push book prices down, because fewer skilled staff are needed to run an Internet bookshop and overheads are lower. Computers and a phone line, connected to a mail-order system, take the place of stores, and can be located in cheaper areas.

Dillons expects that when its site, called The Book Pl@ce, opens on 12 September it will get about 100,000 visitors a month, compared to the 50,000 a month a large high street store might see. It intends to offer 1.2 million titles, available by mail order with a credit card.

Consumers triumph, page 5

Business comment, page 19