Who can stand in the way of the supermarkets - Tesco, Asda, Sainsbury's and Morrisons? It would be easy to conclude, from media coverage, that the food industry has polarised into a battle between a handful of giants, and a couple of piddly corner shops.

A quick glance at our annual ranking of the Top 50 independents shows this isn't quite the case. The new no1, Martin McColl, has sales of £1bn if you include fuel - far bigger than most public companies outside the FTSE 250. And there are several independent chains that could quite easily float on AIM, the alternative stock market - if they wanted to, of course. Martin McColl is a particular inspiration because the management, which owns 80% of the shares, has taken on a ton of debt (not equity) in support of its recent MBO. This confidence should be applauded.

There's no arguing the power of the big four grows with every year. The old 80/20 rule is now more like 90/10. But there are plenty of signs here of resilience. TJ Morris boasts profit margins of 7.4% thanks partly to its sensible move into non-food. Park Garage Group has seen sales rocket by 224% and more than doubled store numbers in the past year. And profits at Harry Tuffins are up 52% despite the flattering attention of Tesco at the recent Ludlow store opening.

However, while the independent sector is clearly viable for the foreseeable future, with average profit margins unspectacular but resilient nonetheless, what is not beyond doubt is that consolidation is both essential and inevitable. We saw this last week with the merger of the Co-operative Group and United Co-op. We saw this with the Co-operative Group's supply agreement with Spar. Just like the big four, all companies need to be more efficient. Like it or lump it, that's capitalism, folks.

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