Supermarkets challenge discounter: High Court will review decision on planning permission for warehouse club

BRITAIN'S big three supermarket retailers will tomorrow line up in the High Court to challenge the planning permission granted to Costco, the US group, to open its first discount warehouse east of London.

Sainsbury, Tesco and Safeway are concerned that the 140,000sq ft warehouse club proposed by Costco in Thurrock, Essex, has been given planning permission as a wholesale, rather than a retail, operation.

They argue that means Costco, and other warehouse clubs planning to open here, will not have to comply with the strict controls - on health and safety and insurance - that apply to supermarkets and other retail outlets, and will have to give less detail on traffic and economic implications of their opening.

They were given leave for an urgent judicial review of the decision, which is expected to take up to three days this week.

Warehouse clubs, which were developed in the US, offer a limited range of food, electrical goods and clothing at a discount. Shoppers have to pay membership fees, typically between dollars 25 and dollars 35, to join and, although they are officially aimed at small businesses, about a third of their customers in the US are individuals.

The Government has issued guidelines on planning permission for warehouse clubs, saying that they should be treated as retailers, but that was published after Costco's Thurrock application. The supermarkets are also challenging a similar decision in Wednesbury, West Midlands, on a club proposed by Nurdin & Peacock. But they are not contesting the company's plan to open in Croydon next year, on a site given retail permission.

A spokesman for the supermarkets rejected suggestions that they were trying to prevent warehouse clubs from opening in Britain. 'We are concerned that planning permission for one form of retailer should apply to all forms.'

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