The long-awaited All Party Parliamentary Small Shops Group report last week came down firmly on the side of independent retailers, saying that their loss would “damage the UK socially, economically and environmentally”.

The group came up with a range of proposals that it believes would help ensure a “diverse and vibrant” retailing sector, including the creation of a retail regulator with a wider remit than the current Office of Fair Trading regime, to carry out a full investigation of the grocery sector.

The group also recommended a moratorium on mergers and acquisitions while the government came up with new policies to ensure diversity.

Group chairman Jim Dowd MP said: “We don’t believe the OFT or the Competition Commission has been robust enough in dealing with this sector, and we would replace them with a regulator whom we hope would maintain a vibrant, diverse retail industry and undertake a full study of the sector.

“This was not an exercise in bashing the big groups, which we recognise are a positive influence on improving standards, but now that big supermarkets have expanded into non food and also into the convenience sector, our fear is that all the different channels will be owned by the same people, and this will do nothing for consumer choice and diversity.

“Some say that the domination of the big chains is inevitable but we don’t agree - it is neither inevitable nor desirable. We are trying to preserve the vital retail offering that has served this nation well, and the regulator will ensure that there is a level playing field without market abuse.”

An official statement from the DTI rejected the call for a regulator and said that competition in the grocery sector was a matter for the competition authorities - the OFT and the Competition Commission - rather than the government.

The statement said: “The government does not see the case for a retail regulator. We are committed to reducing the burden of regulation on business. It is essential that sensible legislation strikes the balance between protecting consumers and not burdening business.

“Retailers are already subject to regulation in a number of areas. Introducing an additional regulator would be unproductive and contrary to government policy.”

Despite this, Dowd remains optimistic that some of the report’s findings will be adopted. He said: “When (Competition Minister) Gerry Sutcliffe appeared before the committee he said he was looking forward to seeing the report. Three different ministers were all too happy to assist with providing evidence so we know the government is keen to engage on this.”

ACS public affairs manager James Lowman welcomed the report’s findings and believes that they will add weight to the association’s efforts to secure a market investigation.

He said: “The report increased the pressure on the OFT because it shows there is a high level of public concern about this issue. With the OFT due to decide on the grocery market in the next few weeks the report couldn’t have been better timed.”

Key Recommendations
Implement a moratorium on further mergers and takeovers

Establish a retail regulator

Revise the ‘two market’ ruling

Introduce comprehensive codes of practice across the retail sector

Review application of rate relief system

Introduce a new requirement for all local authorities to adopt a retail strategy within the Unitary Development Plan