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The UK's competition watchdog has provisionally concluded that the acquisition of a former Co-op grocery store by supermarket giant Tesco led to a "substantial lessening" of choice in the area.

In a statement today the Competition Commission said that it was now consulting on potential measures to address the loss in competition resulting from the purchase of the store in Slough.

Last month the commission ordered Tesco to suspend building work at the site on Uxbridge Road, which Britain's largest retailer bought four years ago.

Tesco purchased the former Co-op store in 2003, but was ordered to sell the site by the Office of Fair Trading (OFT) once the redevelopment of its existing store nearby had been completed.

But Tesco have been unable to find another buyer for the store, prompting the OFT to refer the matter to the Competition Commission in April.

The commission claims that the former Co-op site and Tesco's nearby Brunel Way store cover an overlapping catchment area and that the extent to which other large supermarkets can compete with the latter is limited.

As such officials have ruled that Tesco's acquisition of the former Co-op store has led to a lessening of competition and limited choice for consumers in the area.

Competition Commission chairman Peter Freeman said: "We have provisionally concluded that Tesco’s acquisition of this store has led to a significantly less competitive situation than if it had been bought by a rival retailer.

"Tesco's own internal assessments and the evidence of both stores' performance shows that, under another owner, the Co-op store was the main potential competition to its existing store at Brunel Way."

According to research firm TNS, Tesco boasts a market share of around 31 per cent in the UK's grocery sector.

The Competition Commission is currently undertaking a separate investigation into overall competition in the grocery market.