Powys-based retailer Harry Tuffins claimed Tesco was "trying to sabotage" the opening of its new store in Ludlow by offering a big discount to local shoppers.
Prior to the grand opening of the Harry Tuffins store yesterday, Tesco carried out a massive leaflet drop covering a 10-mile radius of Ludlow offering shoppers £10 off their shopping bills when they spent just £30. The leaflet contained two vouchers, one covering the two weeks immediately before and after the Tuffins opening. The other is valid from 29 January to 11 February.
"I can't believe Tesco is threatened by us," said Harry Tuffins MD Paul Delves. "Why should the owners of a supermarket that potentially takes £300,000 a week be worried by our 3,000 sq ft store?"
Delves said he had contemplated accepting the Tesco vouchers at his store but after looking at the impact it would have he decided that he could not afford to do so. He will, however, be giving evidence of the promotion to the ACS, which confirmed it would submit it to the Competition Commission, which reveals its emerging thinking on Tuesday.
"Tesco talks about one-offs," said ACS public affairs manager Shane Brennan. "As far as we are concerned there are now far too many one-offs. This is a major discount. Maybe Tesco can afford to do this but obviously most independents just can't."
The ACS has raised the issue of vouchers before, in the case of Yorkshire-based retailer The Proudfoot Group. In that now-infamous case, the nearest Tesco to Proudfoot's store in Withernsea was offering 40%-off vouchers.
Proudfoot joint MD Mark Proudfoot expressed his sympathy for his fellow Nisa-Today's member. "I think this is even worse for Paul," he said. "At least in our case we had a well-established store. The Harry Tuffins store is brand new. He doesn't have any customers yet."
Nisa-Today's acting chief executive Neil Turton agreed the events echoed the Proudfoot situation.
"This case of discount vouchering raises valid concerns for bodies like the Commission on fair competition and the importance of protecting vibrant, local, independent shopping for consumers. We are surprised a company like Tesco should see the expansion of a small independent retailer as a threat," he said.
Tesco argued the vouchers had nothing to do with targeting Harry Tuffins but did admit the timing could have been better.
"It is an unfortunate coincidence," said Tesco director of communications Jon Church. "We didn't know about Harry Tuffins when we were putting these plans together. Our Ludlow store was refreshed in November with the introduction of more upmarket lines. This promotion is linked to that."