On Tuesday I posted a practical piece on the proposed new Tesco just outside Bingley. I thought however that something more thoughtful on the subject was needed – mostly to explain how we got to the stage we have with supermarkets and similar mass retailing.
Supermarkets are a child of the swag man – “pile it high and sell it cheap” was the motto of Manny Cohen, Tesco’s founder. And that’s just what he did – self-service, limited in-store service and sharp buying. The fundamentals remain the same – supermarkets succeed because people believe they are cheaper and, much of the time, in most places this is true. Nothing snide about that at all.
What is snide** is when supermarkets lay claim to sharper prices just on the basis of price comparison with other supermarkets. When did ASDA or Morrisons last compare their greengrocery prices to the prices on a market stall and brag about their cheapness in an advert? That’s because the market greengrocer is almost certainly cheaper. And in many cases the same goes for butchers on the market and much else besides. The price promise is a promise to be cheaper than other supermarkets – not discounters, not markets stalls, not van sales – just other big supermarkets.
So you’re warned about price now. What about the impact of supermarkets? The claim these big firms make is that they will create hundreds of jobs – and taken at one level this is true. A large supermarket will employ up to 400 people (rather fewer in “full time equivalents”) and most a quite well-regarded as employers. But what the supermarket doesn’t tell you is the known effects they have on small shops selling convenience goods, markets and, increasingly comparison retailers, pharmacies, newsagents and stationers.
The New Economics Foundation conducted a large study of food markets in London that included price comparisons for a basket of fresh produce between the market and the supermarket:
“The street market prices for fruit and vegetables are significantly cheaper than supermarket prices...”
Supermarkets spend a great deal on telling us about price and about their fresh produce. What they never tell you is that the cheap stuff isn’t the “fresh” stuff. Even farmers’ markets – widely perceived as expensive – were competitive in terms of prices for fresh produce compared to supermarkets.
Supermarkets also destroy towns and destroy jobs – here’s what I wrote in my MSc dissertation on the subject:
“The main findings of the early reviews (BDP Planning et al, 1992, DETR, 1998) showed that out-of-town and edge-of-town retail development did negatively impact on the vitality and viability of town centres: 1) development reduced the levels of town centre convenience shopping by at least 20%; 2) the loss of convenience trade affects the comparison trade within the town centre; 3) that, in most cases, the net employment impact of superstores was negative (DETR, 1998)” *
Yet the Government then and the Government now continue to promote supermarkets – taken in by the snide nature of their marketing, the misinformation and the manipulation of consumer opinion. Opposing supermarket developments isn’t about some sort of cuddly green agenda – it’s about stopping the wholesale destruction of other business through the exercise of effective monopoly power.
*References:
BDP Planning & Oxford Institute of Retail Management (1992), The effects of major out of town retail development: a literature review for the Department of the Environment, London, HMSO
Department for Environment, Transport and the Regions (DETR) (1998), The impact of large foodstores on market towns and district centres, London, The Stationery Office
Supermarkets are a child of the swag man – “pile it high and sell it cheap” was the motto of Manny Cohen, Tesco’s founder. And that’s just what he did – self-service, limited in-store service and sharp buying. The fundamentals remain the same – supermarkets succeed because people believe they are cheaper and, much of the time, in most places this is true. Nothing snide about that at all.
What is snide** is when supermarkets lay claim to sharper prices just on the basis of price comparison with other supermarkets. When did ASDA or Morrisons last compare their greengrocery prices to the prices on a market stall and brag about their cheapness in an advert? That’s because the market greengrocer is almost certainly cheaper. And in many cases the same goes for butchers on the market and much else besides. The price promise is a promise to be cheaper than other supermarkets – not discounters, not markets stalls, not van sales – just other big supermarkets.
So you’re warned about price now. What about the impact of supermarkets? The claim these big firms make is that they will create hundreds of jobs – and taken at one level this is true. A large supermarket will employ up to 400 people (rather fewer in “full time equivalents”) and most a quite well-regarded as employers. But what the supermarket doesn’t tell you is the known effects they have on small shops selling convenience goods, markets and, increasingly comparison retailers, pharmacies, newsagents and stationers.
The New Economics Foundation conducted a large study of food markets in London that included price comparisons for a basket of fresh produce between the market and the supermarket:
“The street market prices for fruit and vegetables are significantly cheaper than supermarket prices...”
Supermarkets spend a great deal on telling us about price and about their fresh produce. What they never tell you is that the cheap stuff isn’t the “fresh” stuff. Even farmers’ markets – widely perceived as expensive – were competitive in terms of prices for fresh produce compared to supermarkets.
Supermarkets also destroy towns and destroy jobs – here’s what I wrote in my MSc dissertation on the subject:
“The main findings of the early reviews (BDP Planning et al, 1992, DETR, 1998) showed that out-of-town and edge-of-town retail development did negatively impact on the vitality and viability of town centres: 1) development reduced the levels of town centre convenience shopping by at least 20%; 2) the loss of convenience trade affects the comparison trade within the town centre; 3) that, in most cases, the net employment impact of superstores was negative (DETR, 1998)” *
Yet the Government then and the Government now continue to promote supermarkets – taken in by the snide nature of their marketing, the misinformation and the manipulation of consumer opinion. Opposing supermarket developments isn’t about some sort of cuddly green agenda – it’s about stopping the wholesale destruction of other business through the exercise of effective monopoly power.
*References:
BDP Planning & Oxford Institute of Retail Management (1992), The effects of major out of town retail development: a literature review for the Department of the Environment, London, HMSO
Department for Environment, Transport and the Regions (DETR) (1998), The impact of large foodstores on market towns and district centres, London, The Stationery Office
**Snide is market trader slang for misleading, fake or deceptive
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1 comment:
Is it the supermarkets that destroy towns and jobs or the decisions of 'free' consumers in 'free' markets?
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