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In its final report, the Competition Commission (CC) has concluded that the acquisition of the Co-op store on Uxbridge Road, which took place in 2003, reduced competition and choice in the market for grocery retailing in Slough.

The CC’s preferred solution is for another grocery retailer to buy the former Co-op site and develop a large enough store to compete effectively with the other large grocery stores in Slough, and especially with the large Tesco store at nearby Brunel Way.

As a fallback, the CC would allow a retailer to move into a smaller unit or combination of units on the current redevelopment if the first option, which would require planning permission, takes too long or if planning permission is not granted.

Since the original acquisition, Tesco has demolished the Co-op store and started work on a new four-unit retail development on the site.

Divestment trustee 

In its report, the CC notes that a competing grocery retailer would face a number of drawbacks operating from the Tesco redevelopment, which would affect its ability to compete in Slough and in particular with Tesco’s Brunel Way store.

A divestment trustee will be appointed to oversee the process and will report to the CC, who will assess bids on a number of criteria before giving its approval. This will ensure that the sales process is carried out objectively and that Tesco is not required to accept any offer that is unreasonable.

Peter Freeman, inquiry group chairman and CC chairman, said, “Our aim, as the best solution to protect competition and to help consumers in Slough, is to see a large store on the former Co-op site fully equipped to compete with Tesco’s existing store on Brunel Way.”

He added that Tesco’s own internal assessments and the evidence of both stores’ performance shows that, under another owner, the Co-op store would have been the main competition to the Tesco store at Brunel Way.

The CC said it was also concerned about further delay to a situation which has dragged on for longer than anyone would wish. It included a fallback solution which would see another grocery retailer operating from the former Co-op site under the current redevelopment.

Competing grocery retailer 

Tesco originally bought the Co-op store nearly four years ago. Freeman said that the CC’s priority is to find a practical and effective solution to a complicated situation without undue delay.

The Office of Fair Trading (OFT) first decided to refer the acquisition to the CC in February 2004, but suspended action while it sought to agree a remedy with Tesco in place of the reference.

This arrangement would have seen a competing grocery retailer move on to the Co-op site, once Tesco had finished work to extend its existing store on nearby Brunel Way. When this did not prove possible, the Office of Fair Trading (OFT) stepped in, on 19 April 2007.

During the inquiry, the CC ordered Tesco to suspend work on the ongoing retail redevelopment on the former Co-op site.

Although the planned redevelopment includes a unit ear-marked for grocery retail, following the discussions with the OFT, concerns were expressed that it might not prove a suitable or desirable site for a competing grocery retailer.

Related links

• Tesco
• Competition Commission
• Tesco / Co-op store acquisition in Slough (final report)