Supermarkets should be taxed to subsidise traditional high street shops, according to an influential thinktank.

Tax recouped from out-of-town stores should be used to reduce business rates on small retailers. The controversial plan to give councils new tax-raising powers is being proposed by the ResPublica thinktank whose founder and director, Philip Blond, has close links to David Cameron and his inner circle.

The report published today – Right to Retail: Can Localism Save Britain's Small Retailers? – argues that government must do more to rebalance the retail economy away from the "big four" supermarkets, which control nearly 80% of the country's £150bn grocery market.

"Britain every year is less and less a nation of shopkeepers – assets and ownership are concentrating, finance has become the preserve of the City of London and high streets have converged as though by centralised design. The UK's 8,151 supermarket outlets today account for 97% of total grocery sales, and 76% of groceries are sold by just the four biggest retailers," the report says

"When we talk about rebalancing the economy, what we are really talking about is shifting back the focus of ownership and economic control to communities."

Blond, whose ideas have influenced the prime minister's vision of the 'big society', said: "For too long government has viewed big as beautiful in retail competition.

"That position is unsustainable and we need radical thinking to bring about true competition. The number of traditional grocery stores has been declining over many years. In 1950 there were around 90,000 butchers and greengrocers. By 2000, this figure had plummeted to fewer than 20,000. The number of bakeries has fared only slightly better declining from around 25,000 to 8,000 over the same period."

Levies on large retailers are already being discussed in Scotland where the plan has been proposed by the government. Sainsbury's reaction was to warn that the tax would slow down growth in the country where the supermarket chain has plans to expand.

Commenting on the report, which was commissioned by the Association of Convenience Stores, Blond added: "The rise of the vast supermarkets with the infrastructure needed to sustain them, a bias in the planning system and their enormous purchasing power has crowded out competition.

"These developments have made it impossible for small retailers to grow.

"We now have a situation where it is unimaginable that a small family owned shop could grow into a retailing powerhouse such as Tesco or Sainsbury's."

http://www.guardian.co.uk/business/2011 ... -thinktank

Or, you know, we could get them to pay the taxes they've been avoiding (including personal taxes on their higher-ups) and use that

Two causes of this, one the supermarkets as they have the buying power to ensure they can always undercut the local butcher, baker and candlestick maker and secondly the public themselves. Time and time again as a group they have "voted" for the cheaper option all the time. The you get the winging about where have the local shops gone.

I use local shops as often as possible. I am off in a few days to get my meat from the local butcher. I try and avoid the big chains for those things.