Sutton shoppers could face the loss of either Safeway or the new Asda supermarket if a proposed takeover bid by American retail giant Wal-Mart goes ahead.

Concerns have already been raised the bid from Asda's parent company Wal-Mart could jeopardise the future of Sutton's supermarkets, leading to the closure of at least one of the stores.

MP Paul Burstow, who is campaigning on behalf of Sutton's shoppers, said he had called for an investigation into the proposed bid.

In a letter to the Secretary of State for Trade and Industry, Mr Burstow indicated the close proximity of the two supermarkets at either ends of the High Street meant it was likely one of them would be axed.

He said: "It was good news for Sutton when Asda decided to invest in one of its first high street stores. It was a sign the tide was turning against the out-of-town shopping centre that has done so much to destroy the traditional town centre shopping.

"If a merger was approved between Asda and Safeway, there must be a real question mark over the company retaining both stores in Sutton town centre. That would be bad for residents, and bad for the town."

Mr Burstow said his concerns were founded on the news Wal-Mart, if successful in its bid, had admitted it would get rid of some of its existing supermarket sites.

"I believe this possible scenario in Sutton could be repeated across the country to the detriment of consumers and the principles of a competitive market," Mr Burstow said.

Since news broke earlier this month, the Safeway group which has 479 stores in its portfolio was up for sale, six major business players have expressed a strong interest.

But even bids from the most recent contenders to throw their hats into the ring entrepreneur and owner of the BHS and Arcadia retail groups Philip Green and Tesco have done little to stop industry experts tipping the American retailer the favourite to win the bidding war.

Speaking to the Guardian on Wednesday, a spokesman for Safeway said an initial takeover bid from retail chain Morrisons, which sparked offers from rival supermarkets, was not likely to result in branch closures.

"It doesn't look like there will be any effects on the stores involved. Morrisons have said any small Safeway branches will probably stay the same but the larger ones will be turned into Morrisons stores."

The spokesman was unable to comment further whether bids submitted by Wal-Mart, Sainsbury's and Tesco would lead to branch closures or job losses.

"Morrisons are saying the only job losses would probably be at the Safeway head office with a possible relocation of staff to their own head office."

January 31, 2003 11:00