Mr Seamus Scally, managing director of Musgrave Group, has warned that Ireland needs to learn from the planning mistakes of others and avoid building the out-of-town hyperstores that kill off local firms.

"Superstores suck money out of towns and villages and leave nothing but devastation and closed up shutters behind them," Mr Scally said. By contrast, Mr Scally said the retailers served by Musgrave "live and work in the communities they serve". He said Musgrave also serviced retailers all across the State compared to the larger supermarket chains which have hardly any presence in counties like Donegal and a patchy presence in the west generally.

He welcomed the Government's recent decision to cap the size of new superstore developments at 3,000 square metres (32,000 sq ft) but said tougher permanent rules were needed. It was not just a problem for retailers but also raised issues for farmers, urban communities, conservationists and planners, he said.

"We have to educate the consumer, wise them up to the choice that is there before it's too late. That's what happened in the UK where the damage was done," says Mr Scally. Musgrave, which has been going since Thomas and Stuart Musgrave first opened a grocery store in Cork in 1876, was not in the business of defending small corner shops who don't reinvest, Mr Scally said. "Our job is to strongly support the independent retailer and resource them to compete with the multiple chains."

The independent sector in Ireland, contrary to the trend in other developed countries, has managed to increase its market share in recent years from 35.8 per cent in 1986 to 43.2 per cent in 1998, Mr Scally said.

Consistent reinvestment was a crucial factor in the strength of the sector, Mr Scally added, noting that retailers and Musgrave had invested £30 million per annum between them in the years from 1993 to 1996. This rose to £100 million last year and is set to reach £125 million this year, he said.

He also called for retention of the groceries order and the ban on under-cost selling if bigger operators were to be prevented from using their deep pockets to squeeze smaller operators out of the market. "It has never been more important than now with continued consolidation in this market," Mr Scally said.