"The evidence is that c-stores and other specialist grocers that provide consumers with a strong retail offer will prosper. This is not to say that life is easy for small retailers, but we do not see evidence of unfair distortions in competition between large grocery retailers and small stores."

One of the key findings in the report stated that below-cost selling by national retailers is not part of a predatory strategy aimed at convenience stores or specialist stores and is not having significant unintended effects on smaller stores.

It also stated that Tesco was not in such a strong position that other retailers could not compete.

Jonathan James (pictured above) of James Graven & Sons, who has just taken over as vice chairman of the Association of Convenience Stores, said: "All I can say is that they must have looked at a totally different market to the one I operate in.

"It's incredibly disappointing for all independent retailers. The only good thing to have come out of all this is that it has sparked a nationwide debate about the importance of small shops and that is an unquantifiable plus for us."

Ken Parsons, the new chief executive of the Rural Shops Alliance, said: "The Competition Commission has reported on aspects of the UK grocery market no less than four times since 1999 and it seems that their boredom with the issue is starting to show - this really is a report for the 1990s. Perhaps back then it was sensible to build more out-of-town, edge-of-town supermarkets, but in 2007 it is not the right response to any question that's actually on today's agenda. In particular, more supermarket outlets will encourage more car use."

To comment on the findings email Groceries@cc.gsi.gov.uk by November 30.

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