As expected, the Office of Fair Trading has referred the UK grocery market to the Competition Commission for investigation.

The OFT said that following its consultation, there had been a number of competition concerns that warranted a full investigation by the CC.

These included the planning regime acting as a costly barrier to entry, that big supermarkets had significant land holdings that could aggravate barriers to entry, that in some instances supermarkets had attached restrictive covenants when selling sites, and that evidence suggested that the big supermarkets' buyer power had increased.

John Fingleton, chief executive of the OFT, said: “This reference will allow the CC to examine in detail all aspects of the grocery sector, ensuring that consumers are able to benefit from strong competition through even lower prices, improved quality and choice and continuing innovation in the market.”