Sunday, 1 April 2012

Tesco vs. 3 old men armed with ferrets careering downhill in a bathtub

My philosophy on using local shops is quite straightforward – using local retailers means cash slooshes around in the Shetland economy a bit longer rather than instantly disappearing off island via a supermarket till. And using rural shops means they’re more likely to survive and continue to provide a valuable and convenient service to their communities - use it or loose it.

However, it’s pretty tricky to avoid supermarkets altogether. Since I do have to spend £100s each month in them, I prefer to give my custom to a chain with which I see eye-to-eye. Therefore, I’ve always favoured the Co-op’s business practices and philosophy to Tesco’s oft-reported and criticised dealings. If you’re in any doubt about the negative consequences of Tesco’s business model have a look at the tescopoly.org website.

My opinions were reinforced during Tesco’s expansion of the Lerwick branch a couple of years back, to the extent that I have only once passed through their doors since then. When Tesco applied for planning permission, they undertook a "Retail Impact Assessment" which stated that through building the extension they won't be in competition with anyone apart from the Co-op on t’other side of town, and they wouldn’t be increasing stock of "non food" items.

All the relevant planning documents are available on the www.shetland.gov.uk website. Some examples include:
"It is important to state at the outset that the increase in sales floorspace will be for the sale of convenience goods only"
"...the modest proposed extension of 868sqm net retail area will not raise any issues of retail impact upon the town centre....Additional diversion will result from the extension, but as the only other main food superstore in Shetland, the Coop will retain a competitive market share."
"The assessment concludes that there will not be any significant impact on the town centre of Lerwick or any rural shops. The criteria is therefore satisfied", the criteria being "that the vitality and viability of existing centres and rural shops will not be prejudiced"
"In terms of criteria, an existing condition relating to previous planning consents at the store is already in place which deals with the issue. In any case, it is not the intention of the proposal to seek to increase the amount of non-food shopping floorspace. Therefore, no legal agreement is required in this case" - the criteria being that "the applicant signs a planning agreement limiting the amount of non-food shopping floorspace"
However, since the application was made and planning approved, Tesco undertook customer research and stated that customers wished them to stock a wider range of non-food items and therefore Tesco wouldn’t be obliged to stick to their word. Local planners were apparently powerless to have them comply as an ‘oversight’ meant that any restrictions only apply to the original store, not the extension (another ‘oversight’ means that the planners can’t restrict Tesco’s opening hours either)

Several town centre shops have closed or suffered a reduction in trade citing Tesco’s non-food expansion as one of the reasons.

The fact that local planners didn’t have the authority to compel the retail giant to fulfil its promises has a silver lining – the planners didn’t have to enter into a protracted and costly legal battle, one which Tesco is well versed in fighting.

There are regular reports of local communities throughout the UK rallying together in attempts to prevent Tesco’s from opening in their locales. Once such example is the residents of the West Yorkshire town of Holmsfirth made famous as the setting for the TV comedy “Last of the Summer Wine”. They’re engaged in a long running battle to prevent the supermarket behemoth from opening on the outskirts of their town. It remains to be seen whether three old men armed with ferrets careering downhill in a bathtub will be enough to halt Tesco in its tracks.

Article for Shetland Life magazine - April 2012

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