Morrisons has told the Competition Commission it is wrong to focus on supermarket power at a local level - and has demanded it takes steps to check Tesco's national dominance.

In its latest submission to the inquiry, Morrisons said it disagreed with the focus on local competition because, although people shopped locally, they selected their preferred retailer on the basis of national factors, in particular corporate brand image.

Tesco's national market share - about 31% compared with Sainsbury's and Asda's 16% share and Morrisons' 11% - meant it could make greater investment than its competitors in a host of business areas. This included advertising to reinforce its brand image and attract more customers.

Tesco's national dominance also gave it an advantage when bidding against rivals for property and land, said Morrisons, allowing it to expand more easily.

"This serves to reinforce its market share by ensuring it is able to buy available sites more easily than its competitors," it claimed. "This self-reinforcing national market position is bound to have a negative effect on future competition unless Tesco's national market position is addressed."

Morrisons' submission took issue with the assertion in the Commission's Emerging Thinking that there was no correlation between a retailer's market share and its ability to secure better buying terms.

"We firmly believe that our larger competitors, particularly those buying on an international basis, buy packaged grocery products at lower prices than ourselves," it said, calling on the Commission to force more suppliers to reveal payment terms to their customers.

Morrisons also disputed the Commission's assertion in Emerging Thinking that there was no planning needs test in Scotland.

The Commission had claimed the lack of a quantitative needs test north of the border had not resulted in more superstores being built than in the rest of Britain - demonstrating the test was not a restraint on development.

But Morrisons said: "Our experience has been that new retail development proposals in Scotland have been required, in practice, to assess retail need in a similar manner to those in England and Wales."

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