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CHECKOUT CHUCKOUT : 3 - Building your case

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Building your case: Addressing the supermarket's claims for the likely benefits of a new store to your town...
'Independent planning consultants looked at our new store in Beverley...but far from damaging Beverley and its economy, the study found that Tesco acted as a magnet. ...Two-thirds of our customers visit other stores in the town centre, and local business leaders say that it has boosted Beverley's reputation as a place where people want to go to shop. So I would argue that strong supermarkets can also benefit local economies and local people.' [16]

Sir Terry Leahy, IGD Conference October 2004

When a supermarket plans to open a store in your town it frequently heralds the new development with effusive publicity about the benefits to the local economy and community. But the reality is different. Here are some of the arguments you might want to employ to counter the supermarket's PR.



Supermarkets damage local economies

'Beverley didn't need Tesco, it was already a prosperous town. Tesco came to plunder not regenerate. They came to take money out of the economy of an already thriving and wealthy market town.'

Richard Wilson, retired lecturer and Beverley resident[17]

When a new supermarket arrives in town, a proportion of the local shops in direct competition will close down – not only small independent retailers but also high street multiples such as Boots, Argos and Dixons. This disappearance of other retailers not only changes the face of the high street and erodes choice, it impacts on the local economy.

While small independent shops often stock local products, despite supermarket claims, much of what is sold in supermarkets is not local. Yet one of the best ways of keeping money in the local economy is through sourcing local produce. A study by nef (new economics foundation) found that one pound spent in a local shop selling local produce puts twice as much money back into the local economy as one pound spent in a supermarket.

Local businesses tend to support the local economy by returning money to it by using local suppliers (builders, plumbers etc) and services (accountants, solicitors etc). For example, while a local shop may be refitted by a local carpenter, a supermarket will be refitted by a big contractor who is employed nationally to refit all of the supermarket’s stores.

Very little of the wealth generated by the supermarkets stays within the local economy. Most of what does stay is in the form of wages, but according to nef, Tesco's payroll makes up just 7% of its total turnover. Supermarkets are like vacuum cleaners sucking money out of the community to corporate head offices and shareholders around the world. But keeping more money circulating in the local economy is what helps to strengthen local economies.

The ramifications of supermarket development extend beyond the town and have a detrimental effect on the economy of the surrounding rural area. Research by the former DETR and by the Environment, Transport and Regional Affairs Committee found that new out-of-centre and edge of centre supermarkets have a serious adverse impact on existing independent shops in surrounding villages and town centres, resulting in their decline and sometimes their closure. [18]



'Ghost town' Britain

Supermarkets say that they do not have a negative impact on shopping centres, claiming instead that they act as 'magnets' increasing footfall into the shopping areas they move into, especially to shops selling specialist goods. This is true to some extent. Rab Smith, a record store owner from Dumfries, where Tesco opened a store in August 2004, argues that while local stores may still attract customers for the more specialist products that Tesco does not sell, Tesco sell all the 'best sellers' more cheaply than they could ever do, 'The new Tesco in Dumfries now sells chart music cheaper than me, so people now only come to me for the rare stuff and the staple 35% of my income from chart music, has disappeared.' These 'best sellers' are vital to small retailers as they provide substantial and reliable sales.

nef explains it like this: suppose a supermarket opens out-of-town or on the edge-of-the town centre, half the residents start doing a third of their shopping there, whilst still doing two thirds of their shopping in the town centre. Meanwhile the other half of the residents still do all their shopping in the town centre. There is only so much money circulating in the local economy, so although all the residents still use the town centre, its retail revenue is reduced. When shops start losing around 17% of their sales, they become unsustainable and are forced to close down.[19]

As the high street declines, it becomes increasingly unattractive to shoppers until the local economy reaches a 'tipping point' where the amount of money circulating is insufficient to maintain all the businesses. The result is 'a sudden and dramatic loss of services – leading to food and finance deserts'.[20] This desertification expresses itself in a several ways. In the case of big centres of population, we see the 'Clone town' effect – as the same national retailer chains move into every high street. In smaller market towns, there are two options – either 'pretty, but useless main streets with a dearth of everyday services' or irrevocable decline.



Edge of town centre sites: 'Spin away' rather than 'spin-off'

Research also shows that when supermarkets open in 'edge of town' centre sites, they can act as a 'gate keeper' for the town centre as in order to get to the high street, shoppers must pass by the store with its ample parking. A study by the former DETR (1998) which included two case studies of edge-of-centre supermarkets, concluded that “the principle effect of the new stores was to divert trade away from the town centre to the edge-of-centre locations”.[21] This is especially true if pedestrian links between the locations are poor or the distance too great. Parking restrictions in supermarket car parks (for example restricted to two hours parking) can also discourage shoppers from visiting other shops.



The 'Ghost Town' effect in action: Fakenham, Stalham, Warminster and Dumfries

When an out of town supermarket opened in the market town of Fakenham, Norfolk:

  • there was a 33% increase in retail vacancies in the town
  • five of eighteen convenience stores closed
  • convenience stores lost 64% of their previous trade
  • the town centre environment noticeably deteriorated[22]

Stalham another Norfolk market town has also suffered from the impact of an edge of town superstore. Tesco opened on the edge of Stalham in 2002 and it has already affected local retailers so much that some have closed down. The local Co-op is now a funeral parlour, the baker's has become a Chinese takeaway restaurant and the butcher had to go into wholesaling to survive. Turnover at the Stalham Shopper, a local grocery store, went down by 50%, but the owner is determined to stay open.[23] The Tesco store was built on the town car park, parking at the new Tesco car park is restricted to two hours and local traders report that shoppers no longer walk from the car park to the town centre.

In Hunstanton, which has a thriving Tesco, the petrol station has closed. Brian Nokes, manager of Scoop and Save, a general grocery store, said he lost a third of his takings when Tesco opened. [24] In Warminster the turnover of town centre convenience stores went down 75%[25]

In 2004, a Tesco store was built on the ring road on the outskirts of Dumfries. The old Tesco store took £300,000 a week, but the new store is taking around £1m a week. Rab Smith, chairman of the Dumfries Retailers Association, argues that this money is coming straight out of the town centre which is becoming a 'clone town' mainly occupied by charity shops, video shops and high street chain stores. The independent traders are losing around 24-25% of their trade and the majors have lost about 12% of their trade – that's around £40,000 a week. The only four businesses that aren't losing out to Tesco are a kilt shop, a jewellers and two hairdressers. Over the last six months, Dumfries has lost at least a dozen shops, with another 20-30 just about hanging on. On average there is one shop closing each week.[26]



Loss of distinctiveness: the 'Clone Town' effect
'East Riding Council says we must have a Tesco ... because footfall will bring trade into the town centre. But Tesco has caused a loss of distinctiveness, a change in the texture of the town. Take a look at what is on offer in Tesco compared to the home baked pies and cakes in the Deli. I can't imagine the discerning visitors we say we want to attract will keep on coming when they realise what is happening. Beverley's charm is declining and its prosperity has very little to do with multinationals, pound shops and mobile phone outlets.'

Retired lecturer and Beverley resident, Richard Wilson [27]

In 2005, nef released the results of surveys completed by members of the public in 130 villages, towns or city areas around Britain to highlight a new trend which nef has dubbed 'Clone Town' Britain. This is a more subtle effect than the 'ghost town' effect, but equally damaging. A 'clone town' is a place that has had the individuality of its high street shops replaced by the identikit facias of global and national chains. The area's retail heart could easily be mistaken for dozens of other bland town centres across the country, money drains out of the local economy, and communities lose the social glue provided by real local shops. Of the towns surveyed, the high street in Exeter, Devon, was identified as the blandest with only one remaining independent shop – the rest were chains.



As nef argues,

'The death of diversity undermines democracy, attacks our sense of place and belonging, and therefore well-being. It hands power to an unaccountable corporate elite; ultimately pulling apart the weave of natural systems upon which our livelihoods and our economy depend.'[28]

But we can take inspiration from a range of techniques employed by community groups in the US, fighting the march of big retail. For example, the 'Keep Louisville weird' campaign in the town of Louisville, Kentucky which aims to resist corporate blandness.[29]



Closing down essential services: Post offices

When Tesco took over convenience store chain, T&S stores, in 2002 they converted the 1000 or so stores to their Tesco Express format. To give customers the range of fresh produce they apparently required, this meant closing the post offices in many of the stores. Pensioners in Witney, Oxfordshire angry that Tesco proposed to close the post offices which had been operating in their local convenience stores began a campaign to save their post offices. The cammpaigners said that the closures would leave 10,000 people in Witney without a local post office. Pensioner Margaret Wardell said that many pensioners depend on the post office to withdraw money, pay utility bills and council tax. It is too far for Margaret to walk to the main post office and she cannot stand for long in queues.[30] Tesco have a national post-office closure programme but groups across the country are resisting. See www.everylittlehurts.org.uk for more details.



Closing down essential services: Car parks and access to public transport
'Since Tesco moved in, the company has gone against the co-operative spirit of its early negotiations and its car park has changed shoppers' habits in George Street – to the detriment of local traders'

Keith Bryden, Chairman of Hove Business Association and owner of Bryden's DIY[31]

When Tesco applied to build a store on a car park site in Hove, East Sussex, the plans were passed by all parties on the council because there was a perceived need for another supermarket for the many elderly residents in the area. Local businesses in Hove also cautiously welcomed Tesco, inviting the company to be a member of the Hove Business Association. However, since the new Tesco opened, local businesses have been feeling the strain which they believe has to do not just with Tesco's financial clout, but with its commandeering of the major transport sites in the area – the local car park and the bus stop.

The Tesco store has been built on what used to be the 100-space car park for George Street. It now has its own 336-space two hour-stay car park but this is reserved for Tesco shoppers, with a £25 fine for overstayers. As a result shoppers using the Tesco's car park, the only parking space available in the area, don't have time to visit the local stores as well as Tesco. The Business Association pleaded with Tesco to open the car park up to other trade but so far it has refused to engage. Local councillor, Averil Older, believes that the council made a big mistake letting Tesco have the car park. Tesco's control over the car park brings 'no benefit to George Street – which Tesco was supposed to boost'. [32] Mark Mulholland, managing director of Mulhollands' off-licence says he has lost trade since a bus stop was moved from further up the road and put outside his shop to accommodate Tesco customers. This has made it impossible for drivers to draw up, park and drop into his shop.



Loss of public and community space

Councils frequently sell off public spaces and community facilities for supermarket development. In Beverley, Yorkshire, the council sold off the historic cattle market and main town centre car park to Tesco. Local people lament the loss of this historic site and town centre traders say the car park is considerably reduced in size and fewer people are shopping in the town centre. The closure and sale of the cattle market site starkly highlights the supermarket takeover of our food production system. In Stalham, North Norfolk, the council also sold the town car park to Tesco. This had been the site of the town's thriving market and weekly auction. Tesco promised that the market could continue on Tuesday mornings. But once its store was open, they backtracked on this promise and the council had to relocate the market to a much less suitable site, where it has now dwindled to a few stalls.

In Sheringham, North Norfolk, Tesco secured an agreement with North Norfolk district council and Norfolk county council to relocate the community centre, fire station and a block of flats used for social housing in order to secure a prime location for its supermarket.[33] In Hodge Hill, Birmingham, the city council proposed to sell off part of a playing field to Tesco.[34]In Workington, after a failed attempt to get a controversial greenfield site listed as 'common land' a local campaigner submitted his own planning proposal for a wildlife haven and adventure playground on a site threatened by supermarket development. The site is the venue for the ancient game of 'Uppies and Downies' which will be lost if the development goes ahead.[35] In Hammersmith, West London, property developers in cahoots with Tesco, asked the council not only to demolish the local cinema, but also a Quaker meeting house, a block of council flats - many of which are now owned by their former tenants - and a Thomas Pocklington Trust home for the visually impaired.[36]



Regenerating run down inner cities?

Supermarkets don't just have market towns in their sights but inner city areas as well. Often local 'regeneration' is seen as a way in, with the supermarket chains claiming to be working in 'less attractive areas' and creating jobs for the long-term unemployed out of the goodness of their hearts. The Grocer magazine has a slightly different take:

'Regeneration projects can gain speedy approval from councils and local communities.

A whole regeneration package, promising mixed use development...is likely to prove far more attractive to planners than just a plain old superstore.'
[37]

Quite how a big supermarket chain can claim to 'regenerate' an area is unclear – supermarkets take money out of local economies and spirit it away to distant directors and shareholders, they fail to create real local wealth to circulate through local businesses. As one of the biggest backers of the New Deal, Tesco is actually being paid a government subsidy of £60 a week and £750 training allowance for some of the 'long term unemployed' staff that it takes on. Tesco mentions several times how it takes on the long term unemployed, it does not however, mention its involvement with the New Deal.

Researchers have commented that where Tesco move into an area of long term unemployment, local people become dependent on Tesco for employment, if Tesco were to withdraw, the unemployment rate would rise again. Tesco also provides training to the long term unemployed, but this training is very specific to its corporate culture and needs.[38]

Meanwhile, supermarket-led regeneration projects pose wider questions about democracy and the role of corporations in increasingly taking over the functions that we have previously expected to be carried out by local authorities and government. Is the corporation, which is both unaccountable and legally obliged to put profit over society, really the best agent to do this?



Creating jobs?

When a new store is planned, supermarkets frequently claim that they will benefit the local economy by bringing jobs to the area. What they don't say is that the arrival of the supermarket actually means job losses due to the closure of small shops and associated businesses, and that these are not compensated for by supermarket openings.

The National Retail Planning Forum, in a study funded by Boots the chemist, found that despite the job gains when a large supermarket opens, on average there is a net loss of 276 full time jobs within a 15km zone around the store, through the closure of smaller specialist food retailers and other small businesses that previously serviced the small shops.[39]

Overal employment figures also don't add up to support supermarkets' claim to generate employment, with small grocery shops providing much greater employment. In 2004, UK small grocery shops had a turnover of around £21bn and employed more than 500,000, whilst Tesco with its £29bn turnover employed just 250,000. As retail sales grow for supermarkets this has not translated into new jobs.

Are supermarkets really committed to creating jobs in the UK? Last year Tesco outsourced its IT and invoicing work to India with the loss of 460 jobs in the UK.[40] Tesco also brought in 60 Polish staff to its regional distribution centre near Milton Keynes in 2005 only weeks after 352 jobs were lost at its nearby chilled food depot.

In the long run, all the supermarkets want to cut costs and one way to do that is to replace staff with technology – many supermarkets are using or are considering using 'self-checkout', where customers pass the food over a scanner, pay by debit or credit card and pack it themselves – with checkout workers out of a job!

The supermarkets often claim that they bring skills and training to the local area, but what kind of jobs are they? Supermarket jobs are typically low paid, unskilled and frequently part-time. Figures from the National Earnings Survey in 2001 show that two out of the worst 10 paid jobs for men and women are to be found in the supermarket sector. Check-out operators was the second worst paid job for men with an average hourly rate for full-time workers of just £5.03. Shelf stackers are number 10 on the list at £5.70 hour. For women, the situation is similarly depressing. Check-out operators come in at number eight of the 10 worst paid at £5.12 hour and shelf stackers also at number 10 at £5.82 hour. [41] Tesco chief executive, Terry Leahy, who was paid £4.3m in 2004,[42] earns 350 times the average Tesco worker.

Compared with national averages, supermarkets continue to pay very low wages, The GMB union says that although the average wage at Tesco is now £6.03 hour – more than its competitors – at these rates Tesco workers would have to work 79 hours a week to achieve the national average wage. According to Phil Davies, national secretary for the food and leisure sector at the GMB,

'Staff at supermarkets have historically faced low wages, and it is time for them to get the respect they deserve....This sector is dominated by part-time women workers often trying to support a family on this pittance.'[43]

Supermarket workers remain notoriously under-represented by unions. Despite their best efforts, trade unions have yet to gain a real foothold. Less than half of Tesco's 250,000 workers are members of a union, according to the Union of Shop, Distributive and Allied Workers and only a fraction of employees at the other big players have representation with Asda coming out worst.[44] Wal-Mart is well known in the US for being anti-union. In 1999, as Wal-Mart was poised to take over Asda, Charles Kernaghan, director of the US National Labor Committee, referring to the company's labour record in the US gave a warning:

'If British people knew more about Wal-Mart, they'd be quite frightened. Wal-Mart is the nastiest company we've dealt with. It has no moral compass. It tours the world looking for workers willing to accept the lowest pay and the least benefits...'[45]

Despite Wal-mart's denial of the claim that it is anti-union, since the takeover of Asda, the GMB union has seen its presence threatened by the supermarket's attempts to stifle the union's activites. Managers at a unionised Asda distribution depot offered workers a new terms and conditions package which included a 10% pay increase, but also a requirement that workers give up collective bargaining with representation from the GMB. When workers rejected the proposal, Asda withdrew the 10% pay increase.[46]

Author Joanna Blythman who worked on the checkout tills for her book 'Shopped', also raises some important health and safety concerns. 'Helping customers pack is all very well, but doing that and scanning goods at the same time involves twisting and stretching your torso in an unnatural way, often putting downward weight on wrists.'[47] This, along with the lack of daylight and fresh air, infrequent breaks, the omnipresent threat of random violence from customers and constant beeping of the scanner makes working at the checkout seem an unattractive job.



Generating traffic

Out-of-town or edge-of-town supermarkets not only divert shoppers from the high street but also lead to a massive dependence on car transport for shopping, restricting access to the elderly and those without cars. Three quarters of supermarket customers travel by car and when new stores open they generate more traffic. Roughly one in ten car journeys are to buy food, [48] and it is estimated that CO2 emissions generated by shopper miles equal those generated by food freight within the UK.[49]

Instead of generating new trade to town centres, it is likely that the increased congestion from cars and delivery lorries actually puts shoppers off coming into town centres altogether. In a recently rejected application to develop a new Tesco store in Unthank, Norfolk, it was the threat of congestion and accidents that swayed the council against the store.[50]

Supermarkets also generate vast amounts of delivery traffic, particularly heavy lorries. They have centralised distribution systems and 'just in time delivery', which means that very little stock is actually held in the stores and they must be topped up daily, by a fleet of delivery lorries, from a regional distribution centre.

Tesco Express in Kew, London occupies a former Europa outlet in a parade of shops in a residential area. Since Tesco moved in, deliveries have increased from twice a day to up to 10 times a day, beween 6am and 11 at night, using a local school bus stop as their loading bay. Pallets, metal trolleys and unloading ramps crash down on to the pavements. Truck engines are kept running. After complaints by local residents and councillors Tesco was told to limit its deliveries to just three a day, between 7am and 8pm. But locals say nothing has changed and there are still back-to-back deliveries until 12 midnight. The Kew experience is not unique. Local residents in nearby St Margaret's, Twickenham, are protesting at an almost identical set of problems, including delivery lorries blocking school buses.[51]

References

[16] Nils Pratley and Julia Finch 'Shop tactics ' The Guardian 6 January 2005 http://money.guardian.co.uk/consumerissues/story/0,14150,1384364,00.html Viewed 28/3/05

[17] Personal communication Richard Wilson, 4 March 2005

[18] DETR (1998) The Impact of Large Foodstores on Market Towns and District Centres www.odpm.gov.uk/index.asp?id=1144757 Viewed 6/11/05 ; House of Commons Environment, Transport and Regional Affairs Committee (2000) Second Report: Environmental Im

[19] New Economics Foundation (2002) 'Ghost Town Britain: The Threat from Economic Globalisation to Livelihoods, Liberty and Local Economic Freedom'

[20] New Economics Foundation (2003) 'Ghost Town Britain II: Death on the High Street http://www.neweconomics.org
/gen/uploads/2hk0dtqtzv0run55afsofu4515122003114309.pdf
Viewed 6/4/05

[21] DETR (1998) The impact of large foodstores on market towns and district centres

[22] Ibid

[23] Quoted in www.rural-shops-alliance.co.uk/sucess_stores/Stalham.htm Viewed 6/4/05

[24] Paul Brown, 'Secret deals with Tesco cast shadow over town' The Guardian 22 January 2004 www.guardian.co.uk/supermarkets/story/0,12784,1128488,00.html Viewed 6/4/05

[25] DETR (1998) The impact of large foodstores on market towns and district centres

[26] Personal communication with Rab Smith, Dumfries Traders Association, March 2005

[27] Personal communication Richard Wilson, 4 March 2005

[28] New Economics Foundation (2005) Clone Town Britain: The survey results on the bland state of the nation http://www.neweconomics.org
/gen/uploads/t3zly355dpog3w55ctaiuu4506062005082504.pdf
Viewed 4/11/05

[29] See www.keeplouisevilleweird.com; Other examples on the US-focused website www.hometownadvantage.org

[30] Friends of the Earth (2004) MP briefing Every Little Hurts: Why Tesco needs to be tamed www.foe.co.uk/resource/briefings/every_little_hurts.pdf Viewed 6/4/05

[31] Friends of the Earth (2004) MP briefing 'Why the new PPS6 could damage town centres' www.foe.co.uk/resource/briefings/pps6_damage_town_centres.pdf Viewed 6/4/05

[32] Personal communication Averil Older 28 February 2005

[33] Paul Brown 'Secret deals with Tesco cast shadow over town' The Guardian 22 January 2004 www.guardian.co.uk/uk_news/story/0,,1128386,00.html Viewed 28/3/05

[34] Gareth Davies 'Hodge Hill fields next on Tesco wish list' The Telegraph 23 February 2005

[35] 'Workington: Grandfather aims to scupper Tesco plans' Times and Star 7 June 2005

[36] Jonathan Glancey 'Coming to a supermarket near you... ' Guardian 22 November 2004 www.guardian.co.uk/arts/features/story/0,11710,1356680,00.html Viewed 28/3/05

[37] The Grocer quoted in Joanna Blythman's 'Shopped: The shocking power of supermarkets' Fourth Estate (2004) pg. 28

[38] Thanks to Annabel Dixon at Newcastle University for sharing her unpublished research on Tesco's Dragonville Regeneration Partnership, Durham.

[39] Porter and Rastrick (1998) 'The impact of out of centre food superstores on local retail employment' The National Retail Planning Forum

[40] Tesco 'Corporate Responsibility Review 2003-2004' www.tesco.com/everylittlehelps/downloads/TescoCRreview0304.pdf Viewed 3/3/05

[41] Mary O'Hara 'Store wars: who will be the casualties ' The Guardian 25 January 2003 www.guardian.co.uk/guardian_jobs_and_money/story/0,,881462,00.html, viewed 28/3/05

[42] Jill Treanor, Julia Finch, and Charlotte Moore '£26m Puts Tesco at Top of the Table' The Guardian 27 August 2004 www.guardian.co.uk/business/story/0,,1291935,00.html Viewed 28/3/05

[43] Terry Macalister '£11m Bonus for Tesco Boardroom' The Guardian 18 May 2004 www.guardian.co.uk/business/story/0,,1219122,00.html Vewed 28/3/05

[44] Mary O'Hara 'Store wars: who will be the casualties '

[45] Conal Walsh 'Walmart is anti-union and has used sweatshops' The Observer 26 January 2003 http://observer.guardian.co.uk/business/story/0,6903,882102,00.html Viewed 28/03/05

[46] War on Want (2005) Asda Wal-mart : The Alternative Report www.waronwant.org/?lid=10788 4/11/05

[47] Joanna Blythman (2004) Shopped :The Shocking Power of British Supermarkets

[48] Based on figures from 'Travel to the Shops in GB, personal travel fact-sheet 6' (2003) Department of Transport

[49] Food shop to home car journeys generate 20% - 50% of CO2 emissions from food transportation within the UK in Tara Garnett 'Wise Moves: Exploring the relationship between food, transport and CO2' (2003) Transport 2000 Trust

[50] See Say no to Unthank Tesco! website www.stopunthanktesco.com

[51] Nils Pratley and Julia Finch 'Shop Tactics '