Retail giant Wal-Mart wants the government to investigate the dominance of supermarket Tesco in Britain, according to the Sunday Times newspaper.
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Figures published last week showed that Tesco’s share of the food market had increased to a record 30.5% over the past three months.
In an interview with the Sunday Times, Lee Scott, president and chief executive of Wal-Mart which owns Asda in Britain, said that it was time for the government to act.
“As you get over 30% and higher I am sure there is a point where government is compelled to intervene, particularly in the UK, where you have the planning laws that make it difficult to compete,” said Scott. “At some point the government has to look at it.”
Scott’s comments are likely to be taken seriously by the government, with which Wal-Mart has a good working relationship. Asda is Britain’s No 2 supermarket group with 16.7% of the food market.
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By GlobalDataIn the interview Scott also revealed that Asda is looking at the possibility of opening smaller convenience stores in an attempt to tackle the growth of the Tesco Metro format.
“A lot of Tesco’s growth has come from the small convenience chain. Andy (Bond, the chief executive of Asda) and his team have got to look and see where the opportunity is for us with that kind of space,” he said.
“There are no limits, all we want to do is serve customers. We run multiple formats in different countries. In Mexico we are the second-largest restaurant operator,” he added.
If Asda does push ahead with the new format, it is certain to test the concept first. Some have speculated that Wal-Mart plans to buy the Somerfield supermarket chain.
Lucy Neville-Rolfe, corporate and legal affairs director and company secretary at Tesco, said: “Previous Competition Commission inquiries have found that the market , and Tesco, operates in the consumer interest. It is a competitive market. The consumer is the winner.”
