Mar 23 2007
A fungus on the retail landscape
Andrew Simms, policy director of the New Economics Foundation, yesterday compared the big retailers to invasive species like the Nile Perch and Japanese knotweed. Honey fungus (Armillaria mellea and related species) also springs to mind, its superficially attractive fruiting bodies sprouting up prolifically while insidiously killing off surrounding plants.
Over the last few decades, the rise of the major multiple retailers and the increasing share of the grocery market taken by supermarkets has dramatically altered our townscapes.
Rampant development of out of town stores in the 80s and 90s (www.fooddeserts.org reports that the UK had just 20 out of town shopping centres in 1976, but over 500 by 1998) drove food retail away from the high street. My native town, Bury St Edmunds, a Suffolk market town with a population of 35,000, now has no specialist greengrocer or fishmonger. Except on market days (Wednesday and Saturday - well worth a visit!), food shoppers can only choose between Marks and Spencer in the heart of the town, Waitrose on the edge of the centre or the handful of butchers and delicatessens.
In the last decade the supermarkets’ move into convenience retailing has seen a return to the high street, as well as extending their influence to village and neighbourhood stores. This has only increased the extent to which the major retailers dominate food retail.
Of all the retailers, none dominates the market quite like Tesco. Just how many Tesco stores are there in Norfolk, for example? By my reckoning, Norfolk has two ASDAs, four Morrisons, eight Sainsburys – and forty-five Tescos. And there are several more in the pipeline, including the notorious Sheringham store.
This extraordinary figure demands closer inspection. Of those 45 stores, 14 are standard Tesco supermarkets, one a city centre Metro, while 12 are smaller Express convenience stores.
The remaining 18 don’t carry the Tesco name at all, operating instead under the One Stop banner, with the slogan “Everyone’s Favourite Everyday Shop!”. There is, however, a familiar feel to the recently introduced own brand lines and marketing materials – everywhere you look in these shops, you’re told that the prices are low.
Tesco has been able to expand into convenience retailing unrestrained thanks to the Competition Commission’s declaration in 2000 that the UK grocery market is actually two separate retail markets - convenience and supermarket. Ironically, the Competition Commission refers to supermarket retail as “one-stop shopping”. Tesco may have passed the monopoly threshold as a supermarket, but it hasn’t – yet – as an operator of convenience stores.
The Competition Commission is once again investigating the grocery market in the UK. They’ve recently published their “emerging thinking”, with an indication that they’ll be looking closely at supplier, market structure and planning issues. Their final findings and recommendations are eagerly awaited - before its too late for many independent stores and their suppliers.
