Tesco is calling for the two-market definition of grocery retailing to be ditched in favour of a single market view, in a move that could leave it breaking ranks with its rivals and siding with small operators.
The comments made in its submission to the Competition Commission's inquiry into the grocery market tally with calls coming from groups in the independent sector, including the Federation of Wholesale Distributors and the Association of Convenience Stores, which have long argued the single definition would protect them - from the likes of Tesco.
Company secretary Lucy Neville-Rolfe said Tesco believed it operated in one market, with 30% of its Express shoppers using the small format for their primary shop. But she admitted that if Tesco's wish were granted then any future deals akin to its 2002 acquisition of the 1,200-store T&S convenience group would be subject to greater scrutiny by the OFT.
The £377m deal had been waved through by the OFT because the two-market definition - which considers one-stop and top-up shopping as separate -meant there were no substantial competition issues. "Yes, the regulators would look at it in a different way, but they would also still look at what the customer benefits would be," she said. "We have worked within the decisions of the government in previous investigations. And we grow our business in accordance with the way the government wishes. With regard to a single market, we try to argue on what looks to us like the facts."
On Tesco's newly launched Competition Commission microsite, Talking Tesco, the retailer backs up its pro-single market stance with views from representatives of the smaller stores, including the Scottish Grocers' Federation, the FWD and the National Federation of Retail Newsagents.
However, Asda remains adamant that a two-market definition is still the way forward. A spokesman for the chain said that while a consumer could do a top-up shop at either a convenience store or a supermarket, it was not possible to do a one-stop shop in most c-stores. "We're part of the c-store market but they are not part of ours," he said.
The spokesman added that Tesco could be in favour of abandoning the two-market definition because a single-market definition would give it a much smaller market share - and therefore less apparent dominance - than it currently has.
In addition, it could prevent other major retailers making a substantial move into the convenience sector through acquisition.
M&S also argues for two markets. But it says the development of mid-range stores and more professional c-stores has caused the distinction to "become increasingly blurred".
Tesco outlines in its submission that it expects to face "even fiercer" competition from Sainsbury's. It admits the discounters, Aldi, Lidl and Netto, have been successful in stealing its customers.
The comments made in its submission to the Competition Commission's inquiry into the grocery market tally with calls coming from groups in the independent sector, including the Federation of Wholesale Distributors and the Association of Convenience Stores, which have long argued the single definition would protect them - from the likes of Tesco.
Company secretary Lucy Neville-Rolfe said Tesco believed it operated in one market, with 30% of its Express shoppers using the small format for their primary shop. But she admitted that if Tesco's wish were granted then any future deals akin to its 2002 acquisition of the 1,200-store T&S convenience group would be subject to greater scrutiny by the OFT.
The £377m deal had been waved through by the OFT because the two-market definition - which considers one-stop and top-up shopping as separate -meant there were no substantial competition issues. "Yes, the regulators would look at it in a different way, but they would also still look at what the customer benefits would be," she said. "We have worked within the decisions of the government in previous investigations. And we grow our business in accordance with the way the government wishes. With regard to a single market, we try to argue on what looks to us like the facts."
On Tesco's newly launched Competition Commission microsite, Talking Tesco, the retailer backs up its pro-single market stance with views from representatives of the smaller stores, including the Scottish Grocers' Federation, the FWD and the National Federation of Retail Newsagents.
However, Asda remains adamant that a two-market definition is still the way forward. A spokesman for the chain said that while a consumer could do a top-up shop at either a convenience store or a supermarket, it was not possible to do a one-stop shop in most c-stores. "We're part of the c-store market but they are not part of ours," he said.
The spokesman added that Tesco could be in favour of abandoning the two-market definition because a single-market definition would give it a much smaller market share - and therefore less apparent dominance - than it currently has.
In addition, it could prevent other major retailers making a substantial move into the convenience sector through acquisition.
M&S also argues for two markets. But it says the development of mid-range stores and more professional c-stores has caused the distinction to "become increasingly blurred".
Tesco outlines in its submission that it expects to face "even fiercer" competition from Sainsbury's. It admits the discounters, Aldi, Lidl and Netto, have been successful in stealing its customers.
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