Smaller retailers should not get involved in the Competition Commission's inquiry into the grocery industry but concentrate on more immediate issues such as serving customers, OFT chief executive John Fingleton warned this week.

Speaking to The Grocer after the industry was referred to the Competition Commission this week for an inquiry that could last up to two years, Fingleton said they should leave submissions to their representative bodies rather than get involved individually.

"The Competition Commission will invite people to make submissions. But small retailers should be more concerned about getting customers through their doors, getting costs down, looking at whether to be part of a common buying group and having better offers. This referral is probably not for them. An individual small store getting involved would have less impact than bigger retailers. My advice to them is to put their focus elsewhere."

The Competition Commission said that the procedure for the inquiry - including who would be contacted during the course of it - would be decided by the investigation team, chaired by Competition Commission chairman Peter Freeman.

But in the first instance, direct contact would be made with those who had responded to the OFT consultation and advertisements would be taken out in trade magazines.

Competition lawyer Guy Lougher said he expected large numbers of smaller retailers to be contacted by the CC in the course of its investigation, but added: "One-person corner shops might be passed over."

The level of detail and type of information requested by the CC would be "beyond normal reports and accounts and companies would have to undertake fresh financial analysis", he warned.

Edwin Booth, chairman of fine foods supermarket chain Booths, warned retailers they faced months of onerous paperwork and thousands of pounds worth of costs if the CC decided to investigate them directly. Booths was the smallest retailer caught up in the CC's investigation into supermarkets seven years ago.

Booth said: "We were not in a position to employ consultants, so I led our response, which involved reading a great deal of material, disseminating that through the business and managing our response. I had four boxloads of letters going to and from us and the CC.

"It was very costly and it would be very easy to let something like that distract you from what you should be doing - serving customers. We spent £20,000 on lawyers' fees related to the inquiry, but it's hard to quantify the cost of time spent on it by myself and our staff."

Booth said retailers should also be braced for the prospect that they will be forced to open their books to the CC.