The Forum of Private Business (FPB) has called on the Competition Commission to produce recommendations with “real teeth” in its grocery market enquiry, following Tesco’s release of record results.

The retailer, dubbed the “King Kong of the retail jungle” by the FPB, has unveiled a 13 per cent rise in full-year underlying profits to

£2.55 billion, and a 10.9-per-cent rise in sales to £46.6 bn. This equates to just over £88,000 a minute, while its 1,500 UK stores sold goods to the value of over £35.6bn, or around £1 in every £3 spent on food in the country.

The 8.2 million square feet of new international store space saw international sales boosted by 18 per cent, although the majority of Tesco’s profits come from its UK network. Tesco holds a 31.2-per-cent share of the grocery market, according to TNS.

FPB chief executive Nick Goulding said the Competition Commission’s report must be able to prove that the continued rapid growth of supermarkets such as Tesco is achieved by fair methods and not by an abuse of power. “The Competition Commission must answer the question of whether King Kong Tesco is playing by the rules. We know that smaller retailers in this sector are struggling because of the influence of their larger competitors,” said Goulding. “The buying power of the supermarkets allows them to squeeze suppliers; the financial clout of the supermarkets allows them to bully planning committees and hog more than their fair share of land; and their aggressive pricing tactics undermine the profitability of their competitors.”

He urged the commission to produce a credible report that would address the problems being experienced by smaller competitors of supermarkets, but he warned that they had so far failed to do so.

“Some protection must be given to those firms giving evidence to the enquiry to prevent backlash, but the commission has not yet promised them anonymity and is thus compromising the report and those businesses,” Goulding added.

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