Tesco has welcomed the Competition Commission's ‘Emerging Thinking’ report. The UK’s leading retailer however denounced the lack of focus on consumers in the report. “I am concerned that consumers barely get a mention in today’s report and I urge the Commission to ensure that they are top of the list for the remainder of the inquiry”, chief executive Sir Terry Leahy responded.

Leahy said: “I believe passionately that consumers have benefited in so many ways from the intense competitive rivalry in this industry." The Birmingham Post quoted a statement by Tesco’s rival Sainsbury, who said it shared the Commission's concern with "any one grocery retailer's pre-eminent position, however acquired, becoming entrenched and incontestable by others". According to Sainsbury, the Commission had "largely" covered the issues that it said should be addressed in the next stage of investigation – "recognising the importance of effective competition to consumers".

Sainsbury added that its main concern was to "ensure that this investigation helps consumers have access to a real choice of one-stop shops and secures a competitive market in the future at both a national and local level". Leahy however is confident that there is still enough to choose for consumers: "All of the evidence suggests that customers are very satisfied with the choice available to them and new stores continue to open all the time. Customers of larger stores drive up to 20 minutes to shop and the report shows that on this basis more than 90 per cent of the urban population have access to three or more larger supermarkets. When you add in smaller stores, discounters, Marks and Spencer and internet shopping the choice is even greater."

Richard Ratner, a research analyst at Seymour Pierce stockbrokers, said to the Birmingham Post that there appeared to be little to worry about for Tesco. "It looks as if the Competition Commission is taking as its starting point a position that commercial success should not be penalised unless there is clear evidence of abuse of market power and harm to consumers. "The only issue that we believe is strongly flagged is Tesco's land bank. There is a sentence indicating a worry about 'ways in which land holdings might be used to impede entry by competitors into the local markets'.

Tesco acknowledged that competition for land and stores is intense and referred to its competitors also acquiring significant holdings of land. "I believe this points to further intense competition in the future", leahy said. "The Commission will investigate all of the issues further and I am very confident that once they look at all of the evidence they will find, as they have in previous years, that our industry is competitive and good for consumers and will remain so in the future."

For an earlier article on the report and a link to the report click here

For the full text of Tesco's response, click here