Supermarkets have issued mixed responses to the All-Party Parliamentary Small Shops Group report calling for increased regulation and a full-blown review of the grocery sector.

Tesco, the UK’s largest retailer, has rebuffed the MPs’ prediction that small shops will disappear from the UK high street by 2015 if the Government does not act to protect them. The modern market, according to Tesco, is not constricted and the power of big supermarket chains does not sound the death knell for small retailers.

“I do not really share the All Party Group’s view that small shops are in terminal decline. There are and will continue to be many thriving small shops that provide exactly what customers want,” said Tesco corporate affairs director, Lucy Neville-Rolfe. “People use both supermarkets and small shops at different times and as the report acknowledges the retail market is fiercely competitive.”

As a spokesperson for Tesco succinctly told just-food last week, Tesco feels that smaller retailers need to innovate and offer services that attract customers. Implicitly, it seems, Tesco believes increased governmental regulation of the retail sector would stand in the way of such progress.

“My conclusion,” said Neville-Rolfe, “is that the consumer is the best regulator and there is room in a thriving market for anyone who satisfies customers.”

As to the charge that supermarkets are harmful to communities, particularly ethnic minorities and underprivileged groups, Neville-Rolfe responds: “Tesco has made shopping simpler, convenient, affordable and accessible, including in deprived areas – helping to meet one of the group’s key concerns.”

In contrast, the fourth-largest player in the supermarket sector, Waitrose, has endorsed the conclusions of the report and joined MPs and pressure groups calling for the Office of Fair Trading to launch a full-scale inquiry into the grocery sector.

Speaking at the publication of the APPG report, Waitrose MD, Steven Esom, said: “The APPG report is a stimulating contribution to the debate on the key issues facing the grocery market. The time is now right to widen the discussion and undertake a comprehensive review of the supermarket, mid-range and convenience store markets.”

Waitrose supports various measures called for in the report, including planning regulations to restrict the construction of supermarkets.

“We want vibrant, thriving high streets, a wide choice of grocery shopping for consumers and sustainable businesses for farmers and small suppliers,” he said. “To achieve that, independent shops and smaller supermarket operators need to be able to compete more effectively for local sites and we believe that planning regimes should  take account  of local competition issues when assessing planning applications.

“In order to promote diversity, choice and competition in the UK grocery market, and to preserve the future viability of the high street, Waitrose believes that it has to become easier for smaller supermarket operators to grow both organically and by acquisition.”