“I wonder if our leaders will follow this trend locally and nationally – in the name of progress and development – and tell us it’s good for us, employment and our communities.” Jo Archer – Executive Officer, Launceston Chamber of Commerce.
The following two articles, published last month in the UK’s Daily Mail and picked up by Jo Archer, were forwarded to us by a concerned reader.
1. Doom for the High Street as 10,000 family stores are driven out’
“Thousands of community stores and specialist butchers, bakers and greengrocers have been lost in the last six years as Britain becomes a supermarket state. More than 9,600 independent convenience stores, many of them family businesses, have put up the shutters since 2000…..
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2. Supermarkets to blame as dairy farmer numbers dwindle
“Another 2,830 butchers, bakers, greengrocers and fishmongers have gone forever because they cannot compete with identikit supermarkets.
At the present rate of loss, independent convenience stores could be all but gone within 15 years.
While thousands of the farmers are under stress or even giving up because of the low prices paid by supermarkets.
Critics argue the situation is ripping the heart out of towns and villages across the country, for the shift removes local character, local produce and consumer choice.
And they are calling for the appointment of a ‘Supermarket Tsar’ to police the stores and ensure they do not abuse their financial muscle.
The shop closure figures were published by the Competition Commission on Tuesday which is investigating the growing dominance of the supermarkets.
Small independents are effectively being overrun by the big chains, led by Tesco, which takes £1 in every £3 spent on groceries. (The largest grocery homeshopping service in the world. )
The Commission found evidence that the giants – Tesco, Asda, Sainsbury’s and Morrisons – may be using underhand tactics to grab custom from independent rivals.
This involves selling items like bread, baked beans, alcohol, tobacco and even fuel at below cost price in a bid to grab custom from community stores.
While they are also using so-called price flexing – keeping prices deliberately low in specific locations to make life impossible for a particular small rival.
The Commission is now to embark on a second part of its inquiry, which will look at whether any companies have been able to build local monopolies, allowing them to dictate prices and levels of service.
This will focus on Tesco, Britain’s richest and most powerful retailer, which holds the biggest market share in 68 per cent of the UK’s postcodes.
The company, which makes profits of more than £2billion a year, has also created a land bank of development sites that will allow it to grow even bigger.
Inquiry chairman, Peter Freeman, said: “It would be a cause for concern if supermarkets, either individually or collectively, were in a position to increase prices or lower their offer in any particular locality or region because of lack of effective competition.” Mr Freeman made clear the Commission will specifically look at whether Tesco is too big.
The Commisison found evidence that farmers, particularly those in the dairy industry, are being squeezed with dire consequences.
The supermarket profit margin on a price of milk has soared in the past ten years, while the amount paid to farmers has fallen.
As a result, an estimated 1,000 dairy farmers – some one in 20 – have gone out of business in the past year alone.
The Commission makes the point that supermarkets are giving shoppers what they want.
The supermarkets’ share of grocery sales, which are worth £123.5 billion, has risen from 67 per cent to 72 per cent in the last six years.
Prices have fallen by seven per cent since 1999, which the supermarkets insist demonstrates they are a force for good.
While the move of firms like Tesco into small convenience stores has brought greater access to high quality, fresh food.
However, chief executive of the Association of Convenience Stores, James Lowman, said: “The Commission has identified strong indications of anti-competitive practices in the UK grocery market.
“We strongly believe that practices such as below cost selling and price flexing are targeted in a predatory manner and have the effect of closing smaller competitors.
“We believe that the Commission will conclude that these practices that remove competition from the market place are harmful to consumer choice.”
Commission chiefs are worried that supermarket suppliers are too frightened to give evidence. As a result, it is to offer farmers and others anonymity.
The National Farmers Union said supermarkets must do more to support their suppliers.
President Peter Kendall said: “Retailers have stood by and allowed a situation to develop in which their margins have grown fat, while farmers and growers have been squeezed and squeezed again.”
Action Aid claims the supermarkets are getting fat at the expense of workers in the developing world.
It said: “More than three million people in developing countries depend on selling fruit and vegetables to UK supermarkets and are seeing their wages and living conditions worsen as supermarket profits soar.”……………
The New Economics Foundation is concerned that the Commission is unable to take into account the cultural impact of losing community stores.
Policy director, Andrew Simms, said: “Smaller, independent shops employ more people pound-for-pound and keep more of each pound spent circulating locally than big stores.
“People are also genuinely concerned about the places where they live turning into clone towns and the loss of the social glue provided by a rich diversity of genuine local stores.
“We believe that these issues must be addressed if the enquiry is to protect consumer’s interests.”
Tesco chief executive Sir Terry Leahy said consumers were the beneficiaries of the rise of supermarkets, both in terms of price and choice.
“I believe passionately that consumers have benefited in so many ways from the intense competitive rivalry in this industry,” he said.
“All of the evidence suggests that customers are very satisfied with the choice available to them and new stores continue to open all the time.”
Director General of the British Retail Consortium, which speaks for supermarkets, Kevin Hawkins said the Commission had cleared the industry of being unfair to suppliers.
He suggested the problems faced by dairy farmers were the result of a failure to adapt to modern methods and the reform on EU subsidies.
“The Commission’s report makes it clear that consumers have benefited enormously from a competitive grocery sector, with food prices falling by seven per cent in real terms since 1999,” he said.
“Unlike utilities, council tax and fuel, food is the only regularly purchased household item which costs less now than it did eight years ago. It is competition between retailers which has made that happen.”
It seems from the comments posted there is a large dose of some small businesses needing to be more customer focussed, then, perhaps more people would respond to what surely is the wish most communities….. NOT to be clones created by big corporations and big governments?
How far has Australia gone down this track and what are our policymakers’ longterm intentions? WHAT is it that France does to support its small businesses?