Asda is hoping to build a £25m store on the site of the former MG Rover plant at Longbridge in a bid to prevent erosion of its market share in Birmingham.
Asda shares market leadership in the Birmingham postcode with Tesco, with 26% of the market each, while Sainsbury's has 18% and Morrisons 9%, according to CACI. But Asda fears it could drop into third position because of new stores in development.
"With all the property our competitors have in the pipeline in the Birmingham City Council catchment area, we are looking at becoming the third player behind Sainsbury's and Tesco," said a spokeswoman.
Asda expects to find out if it has secured Longbridge by the autumn. It faces competition for the site, which could house a 100,000 sq ft store. St Modwen Properties, the company leading the project to regenerate the site, said it was in talks with "all the major multiples".