Competition Commission's recommendation to make planning approval for new stores dependent on retailer's local market share is overturned

The Competition Appeal Tribunal (CAT) yesterday squashed a proposal for a new competition test for proposed new retail developments.

The test had been recommended by the Competition Commission in order to prevent over-dominance of certain retail brands in particular areas.

It would have made planning permission for a new store subject to a retailer's existing market share in an area, based on data from the Office of Fair Trading.

Tesco store
Tesco has vowed to add more than 186,000m2 of store space by April 2010

Retail giant Tesco had requested a judicial review of the idea, saying that it would harm rather than help consumers and further complicate the planning process.

The CAT, headed by Mr Justice Barling, agreed with Tesco that the proposed test could harm consumer choice and had failed to take into account costs as well as benefits. The judge said that the commission had failed properly to consider certain matters relevant to its proposal.

Planning groups welcomed the decision, saying that it safeguarded the purity of the planning process.

To ensure fair and impartial decision making, the planning system should consider only what is being proposed, rather than who is proposing it, said the Royal Town Planning Institute in a statement.

Tesco has vowed to add more than 186,000m2 of store space by April 2010.