Tesco to dominate small retailers

The study raises concerns about the store's power over retailing.

It says that Tesco is set to overtake Spar for market share in "neighbourhood shops".

Convenience stores in town and city centres have become the new battleground for the big grocery chains following the hardening of planning rules for out-of-town superstores.

Tesco and Sainsbury's have moved into the sector with a vengeance. According to a newspaper report yesterday, Asda is to open a series of local stores in an attempt to play catch-up.

The report by Verdict Research says that Tesco made the quickest progress in neighbourhood shopping this year, increasing sales by £200m to £2.4bn. Its market share rose to 5.4 per cent, putting it a shade behind Spar's 5.6 per cent.

An all-party Commons inquiry is drawing up a report which will examine the power of supermarkets. Last week Keith Vaz MP called for the creation of an independent regulator to oversee the big chains.

Nick Gladding, of Verdict, said: "With Tesco's formidable track record, it is hard not to see Spar being forced to relinquish its crown during 2006."