Tory MP David Amess, who chairs the group, called on the government to judge whether the rise of the Big Four was having an adverse effect on communities. "If they agree that there should be some balance they should intervene and do something about it," he said.
His words came in response to the revelation that 42% of towns have five or more supermarkets within a 10-minute drive.
Amess reiterated the cross-party support for local retailers at a parliamentary reception to celebrate their value to communities, which saw more than 50 MPs nominate stores from within their constituencies for the title of Best Small Shop.
The competition was won by Manoj Patel of Manny's in Long Ditton, Surrey. The store was nominated by Ian Taylor MP, who praised Manoj and his wife Minal for taking on a store in "an area in need of revitalisation" and making it such a success.
Manoj said: "From supporting the elderly to tackling local problems or even just being a friendly ear, community retailers do so much good for the areas that they operate in, and it's vital that they are given the respect and support that they deserve."
Presenting the award, Amess said: "We're still a nation of small shopkeepers. Now is the time to raise the public debate, as small shops close at record rates to be replaced by Tescos."
Amess said the group would continue to promote small stores under a new campaign and the banner, "If you don't use it you'll lose it".