Competition Commission says planning system should make supermarket development easier

The Competition Commission has proposed changes to the planning system that would make it easier to build large supermarkets outside town centres.

The government body’s investigation into grocers and supermarkets said that the planning regime acts as a barrier to entry and expansion of grocery retail developments in local markets.


It said the planning system should recognise the difference between sites on the outskirts of town centres, which can be beneficial to customers, and those inside the town centre.

The Commission also said that the control of land by supermarkets in highly-concentrated markets limits potential sites for new stores.

It is now considering the following solutions:

  • The inclusion of a "competition test" in the planning process to ensure a particular grocer doesn’t control too great a percentage of any particular market
  • Local authorities permitted to give or restrict planning applications based on which supermarket was making it
  • Supermarkets be made to divest land holdings in areas where competition is weak
  • Prohibiting "restrictive covenants" – or the sale of land on the understanding it will not be leased or sold to a rival supermarket

Gideon Amos, chief executive of the Town and Country Planning Association, said: "If the urban priority is to get a better mix of retailers the solution cannot be unlimited sprawl into the surrounding countryside. Instead we should be more determined to ensure the competitive use of the many sites already allocated for retail.”

A Tesco spokesperson said: “This provisional report looks at detailed points on suppliers, land and the planning system which we will discuss with the Competition Commission in the coming months

Our job is to make sure that any remedies are justified, have no perverse effects and that the consumer is the winner.”

The Commission’s final report will be published in spring 2008.