Move to shake-up UK Sunday trading divides supermarkets

LONDON, July 8 (Reuters) - British finance minister George Osborne's plan to boost business by relaxing Sunday trading rules has drawn a divided reaction from the country's big four supermarkets.

Under current laws, large stores in England and Wales can open for only six hours on a Sunday.

However, in his first post-election budget statement on Wednesday, Osborne announced a consultation into devolving the decision over Sunday trading rules to local mayors and councils, potentially allowing retailers to better compete with online rivals.

While Asda, Britain's second largest supermarket chain, and Morrisons, the No. 4 player, welcomed the move, market leader Tesco (Xetra: 852647 - news) and No. 3 Sainsbury's were less enthusiastic.

Analysts suggested the different stances of the big four reflected their varying strengths in convenience stores, where goods are offered at higher prices than large stores and business is not subject to current Sunday trading restrictions.

Asda and Morrisons have a limited convenience presence, while Tesco and Sainsbury's have huge convenience estates and might be less keen to keep costly big stores open for longer.

A spokesman for Morrisons said its customers had told the firm they would appreciate a relaxation of Sunday hours.

"On Sundays, they can shop online or place a bet at a high street bookie but sometimes they can't visit their local supermarket. So we support the idea of a sensible change of opening hours," he said.

Asda CEO Andy Clarke said a rule change was "common sense".

Marks & Spencer (Other OTC: MAKSF - news) , Britain's biggest clothing retailer which also sells upmarket food, also welcomed Osborne's proposal, as did shopping centre landlord Hammerson, saying the plans would boost job numbers and the economy.

However, Sainsbury's said it regarded the current set-up as "a sensible British compromise" which works for both customers and employees. "Inevitably the competitive landscape would lead to us opening our superstores for longer on a Sunday," it said.

Market leader Tesco withheld its judgement, pending a study of Osborne's proposal.

"We understand there are strong views on either side of the debate over further liberalisation of Sunday trading. Such a decision is of course a matter for government, striking the right balance between this extra flexibility and the growing number of ways there are for customers to shop already," it said.

The plan was criticised by bodies for small business.

Industry lobby group the NFRN said the changes would cause chaos for consumers and damage the independent retail trade, while The Association of Convenience Stores said research showed fewer than one in 10 people wanted to see the rules abandoned. (Reporting by James Davey and Neil Maidment; editing by Stephen Addison)