Web site launched to face criticism
Tesco has hit back at a storm of criticism by its three main rivals in submissions to the Competition Commission inquiry by launching a web site called Talking Tesco.

Britain's biggest retailer hopes to rebut claims by Sainsbury's, Asda and Morrisons that the planning system should be overhauled in order to prevent Tesco from causing future consumer harm.

On the web site, Tesco says that it 'understands the merits of competition' and has behaved 'responsibly, fairly and honestly in all our actions'.

In submissions to the Competition Commission's ongoing enquiry into the grocery sector, Sainsbury's, Asda and Morrisons all protested that Tesco - which has a 31.4 per cent market share according to the latest figures from TNS - was being allowed to restrict competition.

The supermarkets argued that Tesco was favoured by the planning regime because it was able to hold a land bank of sites for potential stores, which prevented its rivals from building on those sites.

In perhaps the most sustained attack, Sainsbury's joined Morrisons in using its three-page submission to call for Tesco to be forced to sell sites in its land bank that it had not used. It claimed that Tesco had 55 per cent of the 'publicly known industry land banks'.

As a result, Sainsbury's raised the spectre of Tesco growing its dominant market share further to 38 per cent by 2010 and as much as 43 per cent beyond that.

Sainsbury's added that the existing planning system 'restricts local choice and creates the potential for future consumer harm'.

Wal-Mart-owned Asda said that planning should be at the heart of the inquiry, because the existing regime has a 'substantial restrictive and distortionary effect on competition'.

To back this claim, Asda said that only a third of the urban population had access to four different supermarket chains or fascias. This figure falls to a fifth in rural areas.

Sainsbury's agreed with this by calling for the abolition of what it called the 'wholly outdated' fascia test. This test is a measure that was introduced as a result of a previous Competition Commission inquiry in 2003 to determine whether or not planners should allow a supermarket to open in an area.

The Competiton Commission has four key areas of concern: planning, price flexing, supermarkets' relationships with suppliers and supermarkets' entrance into the convenience sector.

Despite their differences, all four of the big supermarket chains contended that there was vigorous competition in the grocery sector.