Checkout queues - not quite what you thought...

Queuing is important. I know you all hate it but it really is important. I’ve blogged before about this matter – in a little moan about the value and importance of differential pricing. So now we’re going to consider the checkout.

Now one of the things about queues (other than the fact that the other queue always moves faster) is that we make an assumption that the shorter queue will take less time. Now this is – on the basis of the information available to us and our common sense – a rational decision. However, it could also be wrong.

Here’s a mathematician studying the issue:

There are easily a dozen variables affecting the line speed that have nothing to do with the number of customers in each line or the number of items in their baskets.

And the other variables tell us that:

Cheque is slower than credit which is slower than cash – not really a surprise and perhaps explains (the rapidly vanishing) cash-only lines

The y-intercept is non-zero – in other words:

It should take you zero seconds to purchase zero items but you can't ignore the fixed time cost of the pleasantries ("Hi. How are you doing? Do you need any help out?") and the transaction itself.

The express lane isn't faster.

You attract more people holding fewer total items…when you add one person to the line, you're adding 48 extra seconds to the line length … without even considering the items in her cart.

So this answers the question about “express” queues – they are not a strange privilege for people who aren’t buying very much but a means by which these people are removed from the main queues – thereby speeding up your passage through with a trolley while making no difference to the customer with but a few items. In truth the rational decision is to separate different queues (i.e. different customer behaviours) in the knowledge that the asymmetry of understanding will improve the rate of throughput. Not only does this make your customers happy but it also reduces the supermarket’s costs (which – in a benign cycle of benefit – further increases the customers’ happiness by helping reduce prices).

Today, there is a further complication with the introduction of self-service checkouts. Again these will remove some customers from the checkout queues (and leave them standing frustrated while the machinery doesn’t work). And the jury is out on this wondrous technology:

It’s easy to see why retailers are turning to more and more self-service kiosks. They put the customer in control, they can reduce operational costs and they save on staff costs. When they are designed well they can improve customer experience because customers grab their goods and leave the store with minimal fuss. When they are designed poorly, they can be time consuming and frustrating having a negative impact on customer experience.

And they might not have cut queues either (although this might not have been the point):

Figures compiled by The Grocer magazine show that average queuing times for staffed tills at Tesco and Sainsbury's, the retailers with the most self-service checkouts, have increased over the past two years. At Tesco, which has 6,000 self-service checkouts in its 1,200 stores, the average wait for a staffed till lengthened from 5min 15sec in 2008 to 5min 42sec this year. Sainsbury’s saw a smaller rise, from 5min 30sec to 5min 35sec.

Although the supermarkets say these figures are nonsense (and they do seem to originate in some way from USDAW, the shopworkers’ union who aren’t going to be in favour of automation). My guess is that there's a befefit to be gained but both the technology and also the customer's familiarity have yet to reach the point at which that benefit is realised.

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Free parking and lower rates - now that might help town centres!

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New Start Magazine report on the increasing problem of a declining independent retail sector noting that:

“Vacancies have continued to increase over the last two quarters and overall shop vacancy has nearly doubled in England and Wales since the end of 2008. More than 12% of shops were empty across Great Britain between July and December last year”

Partly this reflects the impact of a very severe recession on the sector. It is not surprising that retailers struggle and especially independent retailers with low margins and little scope to reduce staffing or argue with the landlord about rent levels. The concern we should all have – a concern expressed in the Clone Towns reports – is that regardless of the cycle of growth and recession, the traditional high street is in decline. Indeed, it is already the case that many secondary centres are barely sustained by a convenience store, a building society branch and a couple of hairdressers.

It seems reasonable therefore to discuss the role of purpose of town centres and why their retail role is declining. A while ago I wrote that:

“Main Street is not simply a place of commerce – a shopping centre. Nor is it (as if in some Soviet dream) just a place for formal events and celebrations. It is a place of engagement and co-operation between merchants, consumers and “ancillary actors”. It is alive.

The driver to the success of Main Street isn’t the shop – although to hear us talk about town centres you would think that – it is the relationship we have with that place and the space it provides for the events and activities of our lives. In Bradford, when Pakistan win at cricket, hundred of fans head for the local centres. Not to shop but to share their happiness at victory.

Yet we distrust such a use for the spaces of our town centres. Many of us grumble about public drinking, about young people gathering together, about hen parties and stag dos. And we certainly dislike political campaigns and religious promotion (unless of course it’s an official and state-sanctioned occasion) – to the point of complaining about these activities.”

Simply talking about shopping misses the point – shops are there because the customers are there not the other way round. In suggesting ways forward, I argued that rather than controls, what town centres needed was programming, animation. But there is a further, practical issue illustrated by this:

“Free on-street car parking spaces in Bradford city centre look set to be scrapped.

The news was immediately condemned by traders as a further body blow in their fight to attract custom.

Only last week a study revealed that the city centre has the second highest proportion of vacant shops in the country.”

So the customer has to pay to go shopping in the town centre – something they don’t have to do out-of-town. Whether at the supermarket, in the retail park or at regional centres like Meadowhall and Trafford Park, we get to park for free. Despite this, local councils – urged on by central government – continue to promote extensions to on street parking charges, congestion charging and even the exclusion of cars from centres. Is it any surprise we go elsewhere?

But it’s worse. For all its rhetoric on supporting town centres. For all the planning policy discussions on hierarchies and sequential tests, out-of-town retailers have a significant financial advantage – the property taxes they pay are half or less than those of the town centre retailer. Our tax regime supports supermarkets. By way of illustration look at one small town – Uttoxeter:

“Town centre traders' business rates are nearly double that of Tesco – despite pulling in only half the supermarket giant's turnover.

The Post & Times revealed last week that the out-of-town chain store takes 50p of every pound spent in Uttoxeter.

But Government figures show the company's business rates are 46 per cent less than the combined total paid by shopkeepers in the centre.

Tesco forks out £386,000 each year for its Town Meadows Way site, while the 145 shopkeepers in The Maltings shopping precinct, High Street, Carter Street and Market Place stump up £714,000.”

So while we are right to look – as I suggested – at town centres as:

"1. places of performance – planned or otherwise
2. centres of culture not temples to shopping
3. a locus for excitement and discovery rather than the workaday
4. as venues for communal celebration, sharing and festivity"

…we also need to look at providing easier access including free parking and at removing the enormous tax advantage we are giving to out-of-town retailers. It would be a simple matter to drop business rates in designated town centres by 90% - and the impact would be immediate and beneficial. And local councils can remove parking charges on-street and drop car park charges straightaway - again to immediate benefit (and probably political advantage too!).

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Local food - yes please. Agricultural protection - No thanks

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P. J. O’Rourke in his attempt to explain the US Government, “Parliament of Whores”, took a look at agricultural policy. This was his conclusion:

“I spent two and a half years examining the American political process. All that time I was looking for a straightforward issue. But everything I investigated – election campaigns, the budget, lawmaking, the court system, bureaucracy, social policy – turned out to be more complicated than I had thought. There were always angles I hadn’t considered, aspects I hadn’t weighed, complexities I’d never dreamed of. Until I got to agriculture. Here at last is a simple problem with a simple solution. Drag the omnibus farm bill behind the barn, and kill it with an ax.”

We’re no better over here. In fact we’re worse. We’ve created a pseudo-moral stance to justify tariffs, import quotas, intervention prices and all the panoply of agricultural protection. A parallel “rural development” industry that talks of local food, area protection, origin protection, sustainable this, and low carbon the other. And this industry cuddles up to those of us who like good, fresh produce and pretend that the only way we (middle class foodies) can get this lovely local produce is to support anti-trade, anti-business measures that destroy value and jobs.

I’m no fan of supermarkets – that privileged bunch of businesses enjoying the largess of a lenient property tax system. And I think we should do more for town centres – like having free parking and lower business rates, for example. But I do not believe that extending the inefficient protectionist measures of the Common Agriculture Policy or having a further raft of protections for food processes will do anything to improve access to local food.

So no I don't want national "food security" strategies, bans on air freight, restrictions of lorry movements or all the various protectionist measures dreamed up by the "rural development" industry. I just want good fresh produce - and will have it because I'm prepared to pay more for it. Simples.

I’m with PJ on this – agricultural protection serves farmers poorly, provides no real security, is corrupt and leads to expensive food. Kill it. And while we’re about this we can kill the “rural development” industry too.

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Food, regulation, hypocrisy and the success of supermarkets

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When it comes to my libertarian instincts, food has always been a weakness. I hate the damage done to the quality of what we eat by the destruction of local food networks, by the homogenisation of fresh produce into a tasteless lowest common denominator. And I find the continued success of fast food retailers like Greggs, Subway, KFC and McDonald’s profoundly depressing – poor quality, barely edible crap sold at the lowest possible price and without any thought to what us poor proles are stuffing in our gobs. It’s no surprise there are so many fat people around when so many graze almost non-stop on such fat, salt and sugar stuffed awfulness.

Despite this my liberal hackles rise when "campaigners" get so mixed up over what they’re opposing in the “great food debate”. The arguments wielded by the greens, by "hyperlocal" fans and by the "transition towns" movement are inconsistent, anti-trade and exclusive. Consider these issues below, for example:

Are the “campaigners” opposing the sourcing of vegetables, flowers and other produce from cheap labour countries? Do they understand how these provide a good growth and development opportunity for countries like Kenya, Ghana and Colombia? Or are they just so bothered by the environmental costs of air freight that those African and Latin American workers can go hang?

Do the “campaigners” appreciate that so-called “fair trade” isn’t fair? Have they stopped and asked what happens to the workers picking coffee or bananas on plantations when those plants are rooted up as no longer viable because of “fixed” trade preferences derived from the “fair trade” concept? Fair trade – rather like Tesco really – destroys as many jobs as it creates, saves or protects.

The “campaigners” rail against something called the “trade balance” (a mythic concept invented by so-called poverty campaigners with slightly less economic reality that the idea of “competitiveness”). But at the same time “campaigners” support geographical protections placed on processes, subsidies to wealthy western farmers and the extension of tariffs on imported fresh produce. Protecting feta or parma ham takes precedence over supporting the economic development of Africa.

Our “campaigners” talk to us about local food networks, the impact of the local multiplier and such worthy sounding “new economics”. Sadly the economics isn’t new at all – the multiplier features in Keynes and is widely criticised as an analytical tool. Tiebout argued that the multiplier is not stable over time or across economic groups making it a difficult measure to apply with high degrees of confidence. The glibness of the LM3 model covers over its weakness as a means of understanding local economies (along with very little sound empirical testing of the approach) - yet it is still used almost without challenge or question.

I am happy to fight the good fight – supermarkets destroy jobs because they employ fewer people than traditional retailing models. But my concern isn’t just about that indisputable fact but that supermarkets also destroy quality, contribute to the drunken, violent urban culture we have seen grow in this country and continue to secure privileged cost advantages through favourable tax and planning treatment when compared to town centre retailing (and especially markets). Sadly the New Economics Foundation and others seem to have lost sight of the 'non-free' nature of the market environment in retailing and development - focusing on rational business behaviour rather than contrary and sub-optimal regulatory and tax regimes.

Maybe we bring all this on ourselves through the decisions we make about shopping but those convenience decisions come about because supermarkets have a cost advantage they would not enjoy if public authorities allowed town centres to compete on a level platform. Lower business rates per square foot, free parking and more flexible planning regimes - a more free system in fact – would go a long way towards restoring convenience shopping to our market towns and suburban town centres. Right now the anti-car, high tax regimes in our towns only serve to increase the success of supermarkets.

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How supermarkets are snide

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

**Snide is market trader slang for misleading, fake or deceptive

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Want to keep Bingley as a market town? Object to Tesco's

Tesco have submitted a planning application for a 40,000 sq ft supermarket on the site of the former Bingley Auction Market (for those less familiar with the town this is where they hold car boot sales and clog up the town on a Sunday). This is the fourth such application for the site with all the previous applications being refused. The link above will take you to the planning web site and you might want to have a go at submitting a comment through to route (be prepared for a tough time!)

So what’s the problem? What should you say?

1. The Auction Market site is designated in the adopted plan as employment land and this designation was supported by the Strategy & Action Plan for Airedale – a retail development is a departure from the rUDP (replacement Unitary Development Plan) and contrary to Bradford Council’s agreed regeneration strategy and priority

2. This is an out-of-centre development (A location outside a town centre boundary but within defined development limits). It is likely that there will be an argument to position the development as “edge-of-centre” but guidance suggests that this applies only to locations with about 200m of the town centre

3. As an out of centre development the proposed supermarket is contrary to the provisions in Planning Policy Statement 6 (PPS6) Town Centres – the key considerations are a) need for the development (section 3.8-3.11 of PPS6); b) scale of the development (section 3.12); c) the sequential test (section 3.13 – 3.19)

4. A significant element of the PPS6 assessment is the impact of the development and the extent to which the development will compromise the economic life of the town. Tesco will argue that they are creating 350 jobs but all the substantive, independent research shows that supermarket developments destroy as many jobs as they create. A supermarket development will draw business away from the town centre – especially convenience shopping such as food, pharmacy and household goods. All of these goods are currently available within the town centre itself from small traders and from a supermarket (the Co-op)

5. The Airedale Masterplan identifies the auction market and adjacent Coolgardie sites as central to the delivery of a good quality, creative and technological employment park – delivery of these high skilled jobs would be compromised by a supermarket development on the site

6. The policy framework for retail and leisure on Bradford is found in section 7 of the replacement UDP – crucially this proposal is contrary to Policies CR2, CR3, CR5 and CR7

You may wish also to raise issues of highway safety, congestion, impact on Bingley Grammar School, flooding and drainage. But remember that, unlike the policy principles above these matters can be dealt with through the planning process and have (in the main) engineering solutions.

Who should you write to?

Local Councillors:

Bingley: David Heseltine, John Pennington, Robin Owens (John & Robin are both members of the Shipley Planning Panel with Robin being Chairman)
Bingley Rural: Simon Cooke, Margaret Eaton, Mike Ellis (Mike chairs the Regulatory & Appeals Committee)

You can also write to the planning service directly quoting the application number (Application No 09/04421/FUL) - contact details are here

My advice is to write directly to the planning service or to the Director of Regeneration at Jacobs Well, Bradford, BD1 5RW (planning.bradford@bradford.gov.uk) with a copy to your councillors requesting they make sure the objection or concern is lodged. The period for objections appears to have ended but I see no reason to stop sending in objections.

Sheep stunt and RSPCA idiocy

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It may be a daft stunt to wheel a sheep into a supermarket but that is nothing compared to the stupidity of this official comment:

"We have tracked down the sheep's owner but we can't return it to its flock for six days because of restrictions on the movement of livestock."

Now I don't like the RSPCA but this kind of comment reveals the utter lunacy of our livestock regulations. Presumably the sheep is camped out in ASDA if it can't be moved?

Idiots

Why do you go to the supermarket when you can get food like this in Bradford's Markets?

Solly's Fruit & Veg, John Street Market (Oastler Centre), Bradford - seen here on tour at Haworth Fine Food Festival. And you go to the supermarket to buy slimy, overpackaged veg? This weekend get down to John Street market or, if you've time, toddle across to Ilkley for yet another food festival - way better than adding a few more farthings to Tesco's profits!

How many supermarkets can one small town take?

The fine town of Keighley is enjoying - if that's the right word - a new ASDA superstore. This vast new addition to the town's shopping offer is situated just off the town centre (so people no longer have to fight the traffic) and was crammed today with customers - well the car park was very full!

So what's the problem? Well Keighley already has...Morrisons, Sainsbury, Iceland, Aldi, Netto and Co-op. And they all seemed busy today as well! And if this is so where is the new ASDA getting all that business from?

I can tell you - it comes from neighbouring towns without a supermarket or with a smaller store - Bingley, Steeton, Crosshills, Glusburn - and from shoppers taking advantage of the cheap clothes, household goods and other non-food products that adorn ASDA's shelves.

Keighley gets 400 low grade jobs (a lot of them part time) at the expense of businesses and jobs elsewhere in the town and in surrounding communities - perhaps as many as 200 jobs will go. Will we see Keighley Market decline again? And smaller retailers in the town close for lack of footfall?

Another victory for our stupid planning system. Another place compromised by the strong arm tactics of the big supermarkets. And remember - if the choice had been left to local decision-makers there would not be this new blight on Keighley!