Wal-Mart president tells UK to investigate the power of Tesco

The head of Wal-Mart, the world's biggest retailer and owner of the Asda supermarket chain, has demanded that the Government investigates the increasing dominance of its rival Tesco in the UK grocery market.

In remarks that will be seen as highly ironic by critics of Wal-Mart's own domination of the US retail market, Lee Scott, its president and chief executive, said governments had a duty to act if a chain took more than 30 per cent of the market.

He also said the UK's planning laws, which have curtailed the number of out-of-town superstore openings and caused long delays to other store building programmes, were hampering competition.

His remarks come as Asda prepares to launch a new round of price cuts in its increasingly bitter rivalry with Tesco, which has a market share of 30.5 per cent compared with Asda's 16.7 per cent. "As you get to over 30 per cent and higher, I am sure there is a point where government is compelled to intervene," Mr Scott said in a newspaper interview, "particularly in the UK, where you have the planning laws that make it difficult to compete. At some point the Government has got to look at it."

Concerns about Tesco's increasing power in the UK retail market have grown in recent months, especially since the publication of its record annual results in April, which showed that profits had topped £2bn and that one pound out of every eight spent in Britain is spent at its stores. In a poll shortly afterwards, half of consumers said Tesco was too powerful.

Mr Scott's complaint mirrors one of those levelled at Wal-Mart in the US. Some states are campaigning to keep it out on the grounds that it kills off local businesses. On Wall Street, as a result, the company is out of fashion, with investors fearful that a groundswell of opposition to the retailing juggernaut may stop it in its tracks.

Tesco says repeated Competition Commission investigations have found that the market operates in the consumer's interests - and points to the price war between the supermarkets as evidence. That is set to hot up again this week as Asda launches its new round of price reductions and buy-one-get-one-free offers that it said tot up to £130m over the next three months. Asda said the total invested in price cuts so far this year is £361m.

Asda, the UK's second-largest supermarket chain, is cutting prices and looking for ways to beef up its presence in the convenience store market to try to reverse recent underperformance against the market leader. Tesco's sales are up 11 per cent against last year, according to the latest quarterly survey by Taylor Nelson Sofres, compared with Asda's 3 per cent.