The supermarket chain that acquires Safeway will have a dominant position within the local market.
A report by Experian, the business information group, states 330 of approximately 500 catchment areas containing Safeway stores will have a reduced choice if a rival chain buys the grocer.
The news comes two days before the four potential bidders: Tesco; Sainsbury's; Walmart/Asda and Wm Morrison are to put their cases to a public forum.
Experian maintain that location is the priority for UK shoppers. Fifty-eight per cent of consumers are motivated by convenience, choosing the store closest to where they live or work.
And if one chain is successful in acquiring Safeway competition will be reduced, as a large percentage of the business will remain with the new occupier.
The four chains are battling with Phillip Green to buy the grocer. Green's bid has not been referred to the Commission.
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