Probe into UK's big four

The Office of Fair Trade (OFT) has signalled that it is likely to push for a detailed probe into the UK’s supermarkets following sustained complaints about the dominance of the four largest chains.

In a statement to the London Stock Exchange, the OFT said that it was concerned about a number of factors which may be preventing new entrants to the market, including the country’s planning system and the increased buying power of the Big Four - Tesco, Sainsbury’s, Asda and Morrisons. It added that consumers’ choice of product and store fascia may be limited by the rapid development of the convenience store sector.

“The convenience sector has changed rapidly and, given our evidence and the importance of this market for consumers, our provisional view is that it would be appropriate for the Competition Commission to investigate,” said the OFT’s chief executive, John Fingleton.

The statement marks a decided U-turn from an OFT announcement in August 2005 that it saw no reason for such an enquiry. A final decision is expected by the end of April.

According to Taylor Nelson Sofres World Panel, between them the UK groceries rang up sales of £18.66bn in the 12 weeks to February 2006, up 4% on the same period in 2005. Multiples took 92.4% of this total, headed by Tesco with a 30.4% share, Asda with 16.6%, Sainsbury’s with 16.2% and Morrisons with 11.2%. There was then a huge gap before Somerfield came in with 5.4% in fifth place.