Leading Article: No credit to the supermarkets

ASKED TO name the groups at the forefront of the campaign to save British cities from the scourge of the out-of-town superstore, Tesco, Safeway and Sainsbury might not be the first to spring to mind. Yet it is these three supermarket chains that will ask the Court of Appeal tomorrow to overturn the planning permission recently awarded for a huge new out-of-town store in Essex. This apparent paradox is easily resolved: the proposed store belongs not to one of them - but to Costco, a new American competitor.

Costco operates 'warehouse clubs', which you have to pay a fee to join. The firm keeps decoration to a minimum, accepts payment in cash only, and sells only a few thousand product lines compared with the 30,000 or so on offer in a big supermarket. While Safeway or Sainsbury might sell mayonnaise in 10 different brands and sizes, Costco will offer only one - by the gallon.

This approach reduces costs and allows Costco to undercut the supermarkets. It also has a side-effect: under British planning law, warehouses do not count as shops and are therefore spared many of the restrictions imposed on supermarket chains by local councils trying to halt the flight of retailing out of city centres. The disgruntled supermarkets will ask the appeal court tomorrow to declare Costco a retailer in disguise, and to set aside the planning permission it received from Thurrock Borough Council for its warehouse.

Tesco and friends have a point. Rather than trying to draw casuistical lines between wholesaling and retailing, planners would do better to consider the effects a proposed development will have on its surroundings, on traffic patterns, and on the lives of people living and working nearby - irrespective of which category it falls into.

As it happens, the anomaly exposed by Costco is already being resolved. Since the planning consent was granted, the Department of the Environment has advised councils to treat warehouses as if they were retail premises - advice that Thurrock may soon put into practice by giving Costco a duplicate permit that recognises the firm as a retailer. It is therefore hard to see the purpose of the legal action.

Britain's big retailers have fluent answers to many of the criticisms that are made of their out-of-town stores. They can rightly point to the lower prices and wide choices offered in such stores, and the more efficient use they promote of scarce urban land. But the supermarkets do themselves no credit by their disingenuous demands for a 'level playing-field'. In the long run they will win more customers by high quality and reasonable prices than by running to the courts.