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Is bigger better for shoppers?
9:56am Monday 9th July 2007 in Comment and Analysis
People in Little Common, near Bexhill, are campaigning against plans to build a Tesco Express store in the quiet village. But Tesco - which owns almost 50 stores across Sussex - has rejected claims its 31 per cent share of the market is stifling competition and forcing small traders out of business.
From a pair of jeans for £4 to an 8p tin of beans, the average supermarket trolley-load is a lot cheaper than it was ten years ago. But is the "Tesco-isation" of our communities a good thing?
- YES, says Andrew Opie, food director of the British Retail Consortium, which represents supermarkets.
Who holds the power in retailing?
It is not supermarkets. It is not regulators or corner shopkeepers.
It is customers. Every time you decide where and what to buy you are stating your preference.
Supermarkets have grown because they offer convenience, choice, service and attractive prices.
More than 90 per cent of us use supermarkets regularly. No one forces us - we freely make that choice.
Retail is fiercely competitive and that is good news for shoppers.
An average trolley-load of goods is seven per cent cheaper than it was in 2000 and 15 per cent cheaper than in 1990.
While household bills, taxes and transport costs have shot up, shop goods are virtually the only things we regularly buy that are cheaper than they were.
Supermarkets are British agriculture's biggest customer.
The volumes they sell guarantee the size of market that efficient producers need and, at store level, the high turnover of fresh produce means supermarkets can offer a larger range of fresh British produce than customers have ever had, confident it will be sold while it is still in the best condition.
Supermarkets are the driving force behind helping customers opt for healthier food.
They have reformulated products, for example to reduce salt and remove fats. They are also providing comprehensive nutritional information, not just on labels, and working with the Government on initiatives such as the five-portions-a-day fruit and vegetable campaign.
Supermarkets are achieving environmental benefits and making recycling possible. Retailers recently contributed £10 million to help customers recycle used electrical products and are creating incentives for bag reuse, reducing energy consumption in stores, making low-energy products cheaper and improving transport fleets.
Supermarkets represent almost a tenth of Britain's economy. They provide jobs for 870,000 people, supporting the communities in which they work and live.
So is there is a future for small retailers? Certainly. We still have 44,000 independent food retailers - grocers, bakers, fishmongers and so on and many more selling non-food items.
They may not be able to compete on price but they will thrive by offering something different from supermarkets - for example, offering niche products and aftersales services bigger retailers can't.
Stores that get it right for customers will do well. Big or small, those that don't will fail.
Is it really in customers' interests to stop retailers opening stores? We should all be pushing for competition to be protected - not individual competitors.
NO, says Trevor Freeman, chairman of the Brighton and Hove branch of the Federation of Small Businesses.
There are some benefits that supermarkets such as Tesco bring but in my view they are hugely outweighed by the disadvantages.
The whole range of supermarkets - Asda, Sainsbury's, Tesco, Morrisons - are as bad as each other.
On the face of it, supermarkets bring jobs in. But we also lose them as they are exported to low-wage producers overseas and smaller rivals are forced to close as a consequence of their large purchasing power. The net effect on jobs is negative.
Supermarkets act with monopolistic behaviour and ignore local communities' needs. They ride roughshod over planning issues and often take the attitude "we are so big you can't afford to take us on".
A lot of the time that works because councils cannot justify legal proceedings unless they are likely to win. Indeed, we have seen this in Brighton and Hove with the Tesco store that opened in Palmeira Square in 2005.
There was a storm of protest when the company ripped brass window frames out of the store and plastic frames in Tesco's corporate blue were installed in their place.
Brighton and Hove City Council threatened legal action and Tesco was ordered to explain its actions at a public inquiry.
The company eventually agreed to restore the windows to their former size and install frames more in keeping with the originals that graced one of the area's grandest buildings.
It is these "convenience" outlets that major supermarkets are now opening that pose the biggest threat to small traders.
They are going head to head but with the buying power and the marketing budget of a national chain there is simply no competition.
Supermarkets encourage behaviour that causes environmental concern, ranging from excessive use of packaging to customers driving miles to the huge stores.
They are also much more likely to source their products from outside Sussex so there is a "leaky bucket" syndrome, in which money is draining out of the local economy. It is that problem nationally that leads to high interest rates. In the end, we are in danger of losing our sense of community.
Independent retailers can still offer a personal service, something sadly lacking these days, but it is hard work to keep up with the competition.
They have to find new ways of attracting customers because there is no chance of competing on the price of a tin of beans or a packet of cereal.
Which of these two opinions do you agree with? Add your comments below.