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UNITED KINGDOM--Tesco, which already dominates the UK’s supermarket sector, is on course to become the largest operator of convenience stores in the country. According to the retail analyst Verdict, sales at Tesco's Metro and Express outlets are rising so fast the firm will soon be bigger than Spar, the No. 1 chain in the c-store sector, reported Freshplaza.com.
At the beginning of November, the Office of Fair Trading was ordered to review its own earlier decision that the supermarket's dominance of the grocery market should not be referred to the Competition Commission for a full enquiry. The Association of Convenience Stores believes that hundreds of its members' stores owned by independent operators are being driven out of business by unfair competition from big supermarkets that have decided to intrude on their territory, Freshplaza.com reported.
According to the report, Tesco is second in the market alongside the Irish company Musgrave, which owns Londis and Budgens. Tesco’s emergence through the ranks of the convenience market is almost sure to fuel further accusations that it has become too large, with a 30 per cent share of total grocery sales.
Tesco's share of sales in local stores is 5.4 per cent, according to Verdict, against Spar at 5.6 per cent. "Spar is predominantly a franchise operation, with limited control over individual stores, making it harder to deliver sales growth," said Verdict retail analyst Nick Gladding.
Tesco has 1,850 outlets of in the UK -- up from 690 in 2001. Of these, 1,200 are Express, Metro or One Stop stores. Last year sales at neighborhood outlets rose by 200 million pounds to 2.4 billion pounds.