Convenience stores hit back at 'flawed' supermarket inquiry

The Competition Commission's conclusion that convenience stores are not in terminal decline was based on unsuitable research data, critics of the watchdog's decision not to attack the dominance of big supermarkets claimed yesterday.

The Association of Convenience Stores (ACS) and the Federation of Wholesale Distributors (FWD) have submitted fresh figures to the watchdog which they say clearly show the fall in numbers of convenience stores under pressure from the might of the Big Four supermarkets Tesco, Asda, Sainsbury and Morrisons.

The release of the commission's provisional findings at the end of October was met with shock by small retailers after the inquiry suggested Britain needed more supermarkets not less for the sector to remain competitive. The watchdog said it had found insufficient evidence to show a decline in the number of convenience stores.

However, market analyst Experian, which supplied data on the convenience sector to the commission, said yesterday that it had already warned the watchdog its survey was unsuitable for the purpose of the inquiry. Experian said the research was restricted to town centres and retail parks and did not show the impact of supermarkets on stores in villages and suburbs.

Experian's "Goad survey" of the retail occupancy of high streets showed that when a supermarket enters an area the number of convenience stores actually increases.

However, a spokesman said: "The Competition Commission was made aware from the outset that surveyed Goad data relates predominately to high street, shopping mall and retail park locations and was not going to provide the breadth of coverage required for an in-depth analysis of the UK convenience sector."

He added that Experian advised the watchdog that far better coverage would be provided by its ShopPoint data which combines data from the Goad survey, list data and desktop research more than doubling the number of retail outlets.

James Lowman, the chief executive of the ACS, said he had been "extremely disappointed" the commission had relied on the Experian data. "It is obviously flawed data," he said. "At this stage, we should be on much more complex arguments."

The watchdog said it had not restricted its research to Experian's findings, but had also looked at data from IGD the think-tank and research organisation for the grocery sector and the Office for National Statistics. Overall, this gave a "mixed picture" from which it could not be concluded the sector was "in terminal decline", a spokesman said.

But John Murphy, director general of the FWD, said he was "astonished that the commission seemed to be unsure that small independent retailers were in decline ... This is so generally accepted within the industry it is quite strange to see".

The fresh submission includes an independent report from Verdict which shows that while supermarket store numbers rose from 34,000 to 35,000 between 1996 and 2006, the number of small stores fell from 35,000 to 32,000.

The ACS and FWD also say a differential in the prices wholesalers and supermarkets pay for goods is in effect putting independents out of business. The commission has concerns about land-bank sites, the planning system and the Supermarket Code of Practice. A final report is expected in the spring.