Small shop owners are crying foul, as new figures show Tesco is set to become the UK's largest convenience store chain and another supermarket giant readies to follow in its footsteps.
A report out today by Verdict Research reveals that Tesco has increased its market share in the 'neighbourhood shops' sector to 5.4%, pulling nearly even with current market leader Spar.
Tesco's move into the high street market, in response to tightened planning rules for out-of-town supermarkets, has netted quick success. The company has increased its sales in the market from £200m to £2.4bn this year, according to the report.
Determined to not fall too far behind, Tesco's competitor Asda has announced its foray into the neighbourhood shop sector. The chain, which is owned by the US discount retailer Wal-Mart, will open its first high-street store in Northampton next year.
The move was roundly criticised by the nation's convenience store owners who pointed to the closure of 2,000 independent stores last year as evidence of the need for a supermarket regulating body.
At the very least, said the Association of Convenience Stores (ACS), the Office of Fair Trading's (OFT) Competition Commission should investigate shop owners' concerns.
"Our evidence has shown that good retailers are struggling to compete as a result of below-cost selling, price flexing and the acceleration of convenience store acquisition by the major multiple retailers," said Shane Brennan, ACS spokesman.
The OFT has said it will decide in April whether to investigate the matter. OFT chief executive John Fingleton claims his agency is not in the business of protecting companies that fail to compete; it is in the business of protecting competition.
"We agree that it is not the OFT's role to protect failing businesses; this is about ensure there is a future for good local businesses that customers want and communities need," Brennan added.
Meanwhile, car and bicycle component retailer Halfords has been accused of "bullying" suppliers by issuing new, strict terms.
The company has told firms that beginning next year it will not pay its invoices until 120 days after their issue date. It currently pays after 90 days, which was raised from 30 in 2003. It is also demanding a 5% cut in prices across all products it purchases.
One Halfords supplier told the Forum of Private Business (FPB) that "unlike in the food sector where there is a code of practice policing the relationship between suppliers and supermarkets, in our sector suppliers are unprotected and vulnerable. Halfords is abusing its total market dominance, as the only retail giant in the sector, and is wringing the money out of its suppliers.
"These new payment terms will endanger businesses and will cause job losses. The government must help small businesses and stop these new payment terms being imposed on us without any negotiation. Furthermore, there needs to be a code of practice in our sector protecting us from this appalling abuse of dominance."
