Supermarkets face competition tests

A competition test for grocery retailers could replace the needs test for out-of-town shopping centres under Competition Commission guidance issued this week.

Its provisional report on the UK grocery market suggests that one or more tests could be abolished and retailers might face a competition test before a planning application is submitted.

But the RTPI complained that the commission has ignored evidence that local communities value the needs test as the measure that has saved many town centres.

The British Property Federation (BPF) called for the local plan-making process to pre-empt competition issues by establishing where retail developments should go.

BPF director for regeneration and development Michael Chambers said the town centre first policy can leave areas outside town centres with limited competition.

The report warns that the planning system is limiting construction of larger grocery stores on out-of-town and edge-of-town sites. The system should recognise that the latter could benefit town centres, it added.

CB Richard Ellis director and head of retail planning Ian Anderson said: "An average family of four has to do weekly shopping in a car and it is easier to drive to a store on the edge of town rather than out of town. But the government should not take its focus off the town centre first approach."

Ten per cent of large supermarkets in highly concentrated local markets have nearby land banks that limit entrants, the study argues.

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