UK's small shops – going, going…

The final report from the UK's Competition Commission's grocery inquiry will challenge Tesco, but will also hurt many small shops. The UK's four biggest supermarkets - Tesco, Sainsbury's, Asda and Morrisons - all came under scrutiny in the investigation.

The Commission concluded that while grocery retailers delivered a good deal for consumers "in many respects", action was needed to improve competition and the relationships between retailers and their suppliers.

The culmination of the two-year probe into the sector will see a new "competition test" in planning decisions on larger stores. Provisional findings in October 2007 revealed around 200 areas of the country where consumers had little choice of where to shop. The Commission also found that of 520 landbank sites owned by supermarkets, more than a fifth were potentially being used to stop rivals building competing stores. The commission wants to stop the practice with a ban on restrictive covenants.

This means that any area with a Tesco, can possibly expect a Morrison's to open nearby. However, it also means that a small family-run grocery can also expect to compete with the likes of Asda.

Competition Commission chairman Peter Freeman said: "We have looked extensively and listened very carefully when looking at all the matters raised with us but our overriding concern throughout has been whether the market is working well in the interests of consumers."

Although UK's four biggest supermarkets - Tesco, Sainsbury's, Asda and Morrisons - all came under scrutiny in the investigation, the focus of the inquiry changed from grocery dominance of the convenience sector into an inquiry of the grocery market as a whole, upsetting many small grocers. It appears that this will be last inquiry into the grocery market, yet there has still been no concentration on the convenience sector, which was what was originally requested.