Tesco wins battle over stores test

Mar 5 2009 by Iain Laing, The Journal

TESCO has won its battle against plans to introduce a “competition test” to curb supermarkets’ dominance of the grocery sector.

The test was unveiled by the Competition Commission last year as part of a planning shake-up designed to boost competition in the multi-billion pound grocery market.

But the Competition Appeal Tribunal (Cat) agreed with Tesco that the Commission did not fully take account of the fact that the test, relating to planning decisions for larger stores, might have “adverse effects for consumers”, among other matters.

Tesco welcomed the decision as a “victory for common sense”. Executive director Lucy Neville-Rolfe said: “It would be particularly perverse to introduce a test that would block investment in the current economic climate.”

But Cat’s decision was met with dismay from the Association of Convenience Stores (ACS), which represents 33,000 local shops. It argued the ruling would slow down the introduction of an effective town centre planning policy.

ACS chief executive James Lowman said: “We need a clear robust retail planning policy that resists harmful out-of-town development and gives power to local people to build vital and vibrant centres for their community.

“Government has been looking at this issue for over three years and while there remains confusion, planning authorities are weaker and less effective.” The proposed competition test was part of recommendations from the Competition Commission following its two-year probe into the sector, and would have ensured authorities blocked expansion plans if there were many large grocery stores in the area or if the retailer applying already had a substantial part of the market.