Tesco has launched a new website to fight back against the claims of rivals and limit the potential fallout from the Competition Commission's probe into the supermarket sector.
"Talking Tesco" is the latest effort by the increasingly isolated UK number one to counteract the submissions of its rivals to the CC’s inquiry, by stressing that its high share of local markets is not bad for consumers.
Tesco has been under fire from its four largest competitors, amid claims sparked by Sainsbury’s that Tesco would hold 43 per cent of the grocery market within four years if the watchdog does fails to action to curtail its growth.
According to Sainsbury, Tesco has 55 per cent of the "landbank" of sites in the process of being developed into new grocery outlets. "Consequently, Tesco's market share could reach 38 per cent by 2010", says the Sainsbury submission. It adds that if Tesco also maintains its recent faster growth rate, it "would achieve an even greater market share of 43 per cent.”
A spokeswoman for Tesco dismissed Sainsbury's claims as "supposition upon supposition". Tesco has also hit back, with its own view of the UK supermarket environment. Talking Tesco believes "customers choose where they shop", citing research that shows that 94 per cent of British consumers have a choice of three or more different grocery chains within a 15-minute drive.
Talking Tesco provides a list of consumer benefits from supermarket power, including lower prices, higher product quality, more choice and better service.
But Sainsbury's, Asda, Morrisons and Marks & Spencer demand changes to planning regulations governing new stores and extensions in an attempt to check Tesco's retail power.
The commission is expected to publish its initial findings in December.
The commission has received 250 submissions from interested parties ranging from individual farmers to MPs, NGOs, trade associations and other retailers. Yesterday they were published on the internet.
Tesco is critical of the OFT, which referred the supermarkets to the commission, because it “did not draw the obvious conclusion - that consumers are benefiting because of the intensity of competitive rivalry.
"Our leading position has been won through fair competitive rivalry," it said in its 36-page submission. "A willingness on our part to take greater risks ... has been a secret of our success over recent years.” Tesco refers to its landbank as a "pipeline" of properties in development and insists "there is nothing anti-competitive in acquiring or retaining a pipeline of land. We do not engage in a spoiling game."
The commission should air its first findings on the £120 billion grocery market in December.
