Supermarkets' land battles
The big supermarket groups have given new meaning to the retailers' axiom that their business is all about property and location.
has found evidence that they buy up land around superstores as a defensive barrier to prevent rivals muscling in on their territory.
It is a way for the Big Four supermarket groups - led by Tesco - to acquire and retain a lovely huge local market share.
Here are the numbers. There are 187 stores owned by one of the Big Four - that's Tesco, Asda, Sainsbury's and Morrison - which have more than 40 per cent of all retailing floorspace within a 10-minute drive-time. Or to put it another way, there are 187 supermarkets with massive local market shares.
Now in these 187 supermarket fiefdoms, the commission says that "110 landsites associated with 105 different stores are a cause for concern in terms of their ability potentially to constrain entry by a competing retailer". In other words, a supermarket group is typically sitting on a precious piece of land near an existing store and doing nothing much with it, largely to prevent a competitor building on it.
And that's not all. The commission says it has unspecified concerns about a further 54 controlled landsites in these areas.
It certainly looks like anti-competitive behaviour on a magnificent scale. And the supermarkets use all the tricks in the book to control the relevant land: exclusivity arrangements, restrictive covenants, leases to friendly third parties and so on.
The commission is proposing two remedies, neither of which will appeal to Tesco et al. It wants to force retailers to sell land in areas where there are few superstores, and it wants to prohibit retailers from using covenants or exclusivity arrangements that would prevent land being snapped up by a competitor.
All of which sounds quite right, except that some people will not like the wider context in which the commission is planting these recommendations.
That context is that it believes that too few of us have a proper choice of superstores, that for the market to function well we should all have easy access to three or at least two of these vast barns of groceries and consumables.
So it wants the planning system changed to provide greater opportunities for edge-of-town developments. And it suggests there should be a new competition test that would allow any planning decision to take account of whether any local retailer has become too dominant.
In other words, as I wrote here yesterday, it thinks the UK could benefit from having a load more superstores. Not everyone will concur. Do you?
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In the West Midlands, where I live, Wm Morrison is just about to open a brand new store. It's huge and very modern in design - but the company owns another large store only 2 miles away - there is no other supermarket competitor within 5 miles. Therefore Morrison esq., have captured a monopoly slice of the grocery market in this location. I'm all for more choice and I'd like to see others such as Tesco's or Sainsbury's also open shop - but I doubt they will due to the unwritten 'gentleman's agreement' which no doubt exists.
While I do not like the idea of the supermarkets' domination, I accept the argument that they fill a gap in the market for choice and convenience for many. The only way to fix this will be a change in consumer values rather than forcing cxhange on the shops themselves. However, as to the overarching finding that we need more supermarkets, I think this is quite simply ridiculous. Surely we have too many of these vast, ghastly, souless boxes already.
Yet more land lost from community uses as councils pursue planning guidelines/targets from government?
While I applaud any drive to remove anti-competitive practices, each planning application should be considered on merit by the local authority.
The only good thing about this finding is that it will be opposed by the people wanting to keep land free of more identikit boxes and the supermarkets wanting to keep their dominion rival-free. Another expensive pointless study taht will die a quiet death?
I certainly do not agree that we need more and larger supermarkets. I speak as a resident of Ilkley, W Yorks [pop: 13k approx]where Tesco, who already has one middle-sized store + a Tesco express, is planning a 50k sq ft store in the centre of town!
If it goes ahead this development will kill off a beautiful and famous small town set in one of the most beautiful parts of the UK - Ilkley Moor. Small retailers cannot compete. The high st is dead.
No because it is only economic for a retailer to build a superstore on high priced land if the catchment area will support it. Forcing the retailer to allow a competitor in that catchment area will reduce the number of stores or raise prices neither of which will benefit the consumer. Alternatively retailers may opt for mini stores with higher prices and less choice. If it aint broke don't fix it.
Land banking, where land controlled by private interests is left undeveloped or restricted, has become a serious issue. There are a number of ways to protect the public good from the negative effects of land banking, as the Royal Town Planning Institute has said:
Firstly the Government could address the role of restrictive covenants and other private agreements that remove the potential for competing land uses.
Secondly Government could introduce a non-development land tax that financially inhibits private interests holding land that otherwise might be used to the public good, for example, by introducing more competition or by building more homes.
Thirdly, new anti competition or anti-trust legislation could be used to restrict the dominance of any one supermarket chain or land holder that might restrict the operation of the market, in ways that unduly reduce retail or indeed housing choice.
Is there any legal way in which an owner of property can be forced to sell it to a competitor other than when it is agreed as part of a 'Take Over' bid? Personally I doubt it.
i think there should be more choice of shops. get tesco`s to sell some of their land , give others a chance.
When I walk into any of the big 4 supermarkets they all look the same and sell the same stuff. How is providing more of these large blnad warehouses providing consumers with more choice?
The desire to bring down prices at any cost is resulting in tasteless food (usulayy with low nutritional value, obliteration of our farming industry, a monotonous townscape and gridlock on our roads and airspace as most products travels half way round the world before it arrives on our shelves!
It seems that cost is now more important to us then quality of life and respect for our country.
Your last point is the key one - if all the Royal Commission delivers is fairer competition between supermarkets then we are going to sleepwalk into a future of grey suburbia and unhealthy and unsustainable lifestyles driving everywhere. We should instead encourage by our consumer habits local food shops and markets that we can walk to and where we can buy locally grown, seasonal and if where possible organic food. This is not some green idealistic vision but is probably essential if we are to get a handle on obesity and climate change. The Tescos of this world won't won't deliver this future to us - so hopefully the Commission final report will address these fundamental issues.
I'm with the commission, the use of giant superstores has gone way too far, and competition is the way to trim their wings. We need other smaller supermarket groups to be given preferential treatment, so we do not have an oligopoly of supermarkets, but an actual competitive market.
I've recently moved from London to an area where there are still a lot of traditional butchers, fruit shops and bakers selling better product at lower prices than the Supermarkets.
Having shopped exclusively in supermarkets for years (even when I was in France) it's such a joy to rediscover these small specialist shops.
When you ask for bacon at the butchers, he doesn't hand you a plastic packet that's travelled for miles, he actually slices the meat in front of you. You can actually watch the other guy making the sausages.
Yes, you can wait 10 minutes to be served with only a couple of people in front of you in the queue, but the flavour wipes the floor with any of the so called "Finest" supermarket offerings - and for less cost.
It wouldn't be practical to do your entire weekly shop this way, but I feel it's important to keep these shops going strong.
We have an Asda in walking distance, and a Tesco a 10 minute drive away. That is plenty "choice" in my book. Adding another supermarket in the mix would only, as someone else pointed out, give us another identical looking building with a practically identical range of products to the existing two, and would threaten the existance of these wonderful specialist local shops.
That said, Asda, to be fair do stock a surprising amount of local produce and have it clearly marked as such.
Our Tesco on the other hand have a very poor selection of local produce - e.g. they sell beers from all over the world, but despite having a fantastic local brewer (Cains) they don't stock it!
I live in Glasgow Southside, I have six supermarkets within an easy drive,one within a 200 metre walk.
Morrisons are building at Giffnock, one mile away, M&S have opened at Silverburn along with Tesco just recently,three miles away.
There is lots of vacant brownfield sites,old hospitals,shut schools factories and dockland. A lot of it has been built up with flats, which they are now having problems selling.
Anybody can accumulate land all you need is money.For land purchase it can be done through nominees.
Land near us nobody knows who owns it.After a search you find a company in the Cook Islands has its name on it.You can get no further. Its held for investment.
Why not the supermarkets everybody else is doing it.
regards
jimmy
About three years ago one of the supermarkets applied for planning permission to put up a store in a Scottish market town called Huntly in Aberdeenshire. It already had one small supermarket but it also had a thriving town centre.
Within weeks of this application another one popped up from one of the other major supermarkets. Although both met with huge opposition from locals and councillors the view was that if the council rejected them then they would simply appeal to the Scottish Govt and win. So both were given the go ahead with some restrictions on what they could sell to protect local businesses.. Mainly electrical goods such as TVs etc. That was however overturned later under appeal.
So now the town centre is loosing shops at quite a pace and many are boarded up. The local garages are also loosing petrol business of course.
Local farmers haven't of course benefited at all from this invasion.
Last week a third supermarket also applied for planning permission to build a new store.
Enough is enough.
more edge of town development = more car travel = more pollution... and we're supposed to be cutting carbon dioxide emmissions?
all this stuff doesn't benefit consumers, it benefits other supermarkets. Sainsburys will be happy though, we should all be thankful for that (not).
and isn't it same old contradictory behaviour from our esteemed leaders - they build more roads for more cars and more airports for more aeroplanes and then tell the population to cut travelling.
please, connect the action to the talk.
We live in a small market town near Exeter,Devon, With a Somerfield, Costcutter and Tesco Metro. Exeter(7 miles) has 2 Sainsburys and Tesco. Five years ago Tesco (allegedly) bought up all spare land around Somerfield preventing them from expanding and improving. Somerfield have just managed to do a deal with some other neighbours for land, but too late, as Tesco has an application in for huge site, with the carrot of housing and cash for link road, on the beautiful green space on the approach to town (which is probably a flood plain). Crediton was recently praised for it's range of individual shops on the High St, but these will now be threatened, traffic and air quality (already very bad)will get much worse, and the approach to the town scarred. We need more housing and we need a new single site secondary school, We have a huge milk processing plant right next to the church in the centre of town. Why is a more holistic and long term approach to planning not applied.Why is Tesco probably going to be able to build on green belt developers wouldn't get permission to build much needed homes on?Why has land banking been allowed to go on for so long?
Why did the Competition Commission not block Tesco's takeover of Dobbies Garden Centres? Diversification? - pull the other one. It is landbanking with income. Very smart, but not good for competition or prices
No need to force them. Simply tax land by the square metre whether it's used or not, has buildings on it or not.
Giving relief from business rates simply because land is unused makes land banking feasible. The government changed the rate relief in the budget, removing business rate relief. So on 1st April 2008 a whole load of commercial properties are going to hit the market or we'll see a load of demolitions.
Get rid of council tax, business rates and replace them with a land tax with no relief. Large numbers of empty and derelict properties would come on the market.
We need less regulation, not more.
There are two different issues when in comes to supermarket competition that need to be separated out.
First there is competition between different supermarkets
Second there is competition between supermarkets and other retailers (and not neccessary small retailers - supermarkets are a growing competitor for the likes of Threshers, Boots, Halfords, Next, WH Smiths, Waterstones)
The second issue concerns me more than the first.
I agree with the Royal Town Planning Institute spokesman this morning. We need to defend our town centres, not destroy them.
Jesus Jiminez
Morrisons recently built an enlarged store in Wetherby and ,it is said, purchased the area known as the Horsefair Centre. It was not very long before a well visited greengrocer and a newsagent disappeared. Were their rents increased to an uneconomic level?
Answers to these possibilities on a postcard please.
I've lived in Newcastle and in London. In both cities, you can do a lot of your shopping more cheaply in the various markets and specialist food shops than you can in a supermarket.
It seems many people choose the supermarkets for convenience. It takes me more time and effort to shop, but I get better value for money, support small businesses, etc.
I don't know what the situation is outside the cities, but many of us have plenty of choice. The fact that people don't support the small businesses as much as some say they should is often a matter of their own preferences.
But my experience of smaller grocery chains is that they're more expensive than the largest ones. And they have less choice. So if we're going to have these things, let's make them large and far-ish between, rather than smaller, more expensive, less well stocked, and on every street corner.
It is ironic that the only concrete example the report refers to of restrictive use of land policies is when the Co-Op acquired and closed five AllDays stores in Northumberland. The report says there were concerns that it was "undertaking strategic behaviour to create local monopolies in these areas". Typical of the ´óÏó´«Ã½ to bash Tesco instead!
So you've been captured by the Tesco PR lobby I see ? Try opening your eyes !
Just because the Competition Commission can't see the problem [how hard did they look ?] doesn't mean there is not a serious problem. Did you try and speak to suppliers, off the record, yourself ?
It is called 'investigative journalism' - you ought to try it sometime, although it is hard work - harder than reading company press releases..
What comment do you make about Tesco, who frequently build shops 10-20 % larger than they've been given planning permission for, knowing that their lobbying juggernaut will never be overcome after it has been built ?
In Carmarthen they built a Tesco Extra against the wishes of local people, in a small market town where butchers and bakers of an independent nature are still to be found. Tesco moved out of their 'old' site, on which they have never paid any rates, to a new site on which they have a long 'rate-free period'. Disgusting.
Think the recommendations proposed by the competition commission are an absolute disgrace. The reason this country is in such a mess with issues such as obesity is due to the control exerted by supermarkets and other globally dominating food producers & retailers. Supermarkets do not offer any real choice, only the illusion of choice, and in many cases they are responsible for the total decline of not only the high street, but also many of the producers in the UK, who cannot compete with imports, hence we are facing an unsustainable food chain.
Where in all their learned and no doubt costly considerations have the commission reviewed issues such as health of the consumer and sustainability?
I am amazed that on one hand, most people are complaining that "supermarkets are taking over, closing down High Street shops, etc" and yet when it comes out that some are landbanking they say "give other supermarkets a chance to build on the land and give us a choice".
Make your minds up.
This report largely misses the elephant in the room, which is that supermarkets have free car parking, whereas visitors to local shops must often pay to park on the street. The Tories cottoned on to this massive trading advantage in a recent policy proposal.
Local councils are wrong to subsidise on-street residential parking, which blocks off suppliers for local shops as well as their clients, whilst making no provision for local shops.
What about the independents/small retailers are they all to shut down?
Only the big ones will be around and then the prices will start to go up and we will all suffer
I work in a small town in berkshire and the local shop is under threat from Tesco in the next village !
I have seen no mention of on-line grocery shopping, yet surely this is relevant to the argument. I believe that on-line shopping will increase substantially in the next few years, ensuring competition between the big supermarket chains. As far as non-grocery items are concerned, the market is already well served by other non-grocery chains so the absence of superstores does not disadvatage consumers, especially if people are less likely to be 'in the store anyway'.
The simple thing to do is do boycott all superstores. I shop in local shops, and refuse to set foot in a Tesco ever again.
What an opportunity for the government to legislate for a 'land grab' from the supermarkets restrictive practice buffer zone and build affordable homes for first time buyers on the new discovered land.
It could be spun in true government style as the 'new consumer on the doorstep partnership programme' with supermarkets invited to subsidise the development costs from their excessive profits.
Let's have some real socialism, it must be a basic human right to have
affordable housing and cheap groceries in the locality?
All this is not new. About a year or so ago, ´óÏó´«Ã½ News did an article about a town in Cornwall (I think it was Redruth) where the only supermarket in town was Tesco and they were reported as owning all available plots around town where a competitor could set-up business. Surely the way to stop this land-hogging is to put a tax on land held without planning permission applied for beyond a reasonable time - say 2 years.
supermarkets have changed shopping of all kinds and not necessarily for the better. The review as far as I'm concerned has not done enough to protect the "smaller" retailer and as usual, makes you wonder if it was worth having at all.
Anyone watched the Wal*Mart Film documentary? If not, I suggest you do - highly informative and you can draw many parallels between US and UK supermarket behaviour, none of which help local communities one iota.
The Competition Commission have not addressed the real issue, which is the demise of the small local trader. Recently, a Tesco Metro opened in Hatch End, near Harrow forcing a small trader out of business because of their huge muscle and loss leader policies. In South Hampstead Tesco's have applied for permission to open a metro on the site of a former pub, there are two small local supermarkets opposite, 2 Tescos, a Sainsbury's, M & S, a Waitrose and a Morrisons within a mile and a half. Whilst the large stores will survive, the small shops will go. Soon we will live in Tescoland!!!
We need a Morrisons out here on the fens. Tescos have us in their iron fist, and won't let anyone else in to do business, apart from a small Co-op in Chatteris and a Lidl's in March, which is great for chocolate and wines.
Let's bring in a raft of punishments for monopolistic behaviour, and then use them to beat some money out of the big four.
Colin Smith is right- Land Value Taxation is the way forward, at least for any land zoned for commercial use.
In Partick, Glasgow (an area already well served with small supermarkets and grocers), Tesco want to not only build a massive superstore ... but to ensure a captive market while they drive out the smaller competitors ... drop 900 student flats on top of it.
This would create a Stalinistic concrete monstrosity that would simply dominate the surrounding (mostly residential) 2 story properties. The serfs would have a new lord in his castle however we peasants fight on.
I do believe there should be more choice, I live in a part of London where there is only Tesco yet there is space for more. As it essentially has a monopoly the store appears to put little effort into re-stocking, good customer service etc, competition would improve service and choice!
I'm sure they're all doing this equally, but I've noticed more Tescos than anything else.
Land Banks - Tescos has significantly more than anyone else AFAIK.
There's a simple solution to this and the problem of derelict, surplus or inefficient use of land. Replace Non-Domestic Rates and Council Tax with a Land Use Tax. The more land you own the more tax you pay (obviously with exemptions for national parks, farming and similarly used land).
I think the results haven’t factored in technological innovation. I’m pretty sure all of the big 4 have home delivery via the internet. More and more people (especially those in city centres) are likely to get the bulky good delivered and then go out to get small items/fresh goods from another shop. Hence looking ahead (10 years + I’d imagine) the mega stores won’t be as profitable due to the high overheads. By the time the supermarkets get around to getting the land on the market (after getting out of existing contract, ect) and the competition plans and builds a new store, the problem will solve itself.
so many people complain about tesco taking over, so who are all the people shopping there? i suspect that, as with most things, people like complaining but are not prepared to pay higher prices in the smaller independent shops in order to keep them open.
Calling for more superstores in different flavours is missing the point. What we need is fair competition between superstores and local small shops, which have all but died out in many areas. There's certainly nowhere within a reasonable distance of where I live to buy food other than the big supermarkets.
If the government should be doing anything, it's changing planning regulations (and possibly intervening in supermarkets' land-grabbing) to make it much easier for local shops to compete.
Couldn't they sell their land as buy one acre get one acre free????
~36: "Land Value Taxation is the way forward, at least for any land zoned for commercial use."
Why not on domestic property and while we are at it, how about CGT on prncipal residences? Perhaps empty properties shold be forcibly sold to free up capacity in the housing market and reduce prices to sensible levels?
Sauce for the goose, but I suspect not for the gander.
every deed influenced by greed should be avoided but in capitalism, it should be integrated to principal than regulation.
With the big 4 supermarkets providing internet shopping and home delivery becoming more popular by the day, surely the notion of having competing stores right next door to each other is a moot point.
The high street has been dead for 10 years, and it has taken the OFT this long to realise it.
Buying up land is not anti-competitive if everyone with the ability to mimic it or has the funds to purchase the land is doing it. As long as both sides (or all 4 in this case) are equally handicapped by the other 3 then there is no anti-competitiveness.
Furthermore, the prices in supermarkets are so close to each other these days, the OFT should be looking into price-fixing, not land-fixing.
LOL .... my son who is studying business and finance has the answer..
He says it's easy to understand why the Govt loves supermarkets so much. Essentially cheap food means we spend less money shopping so the Govt can take more tax from us..
There's some horrible logic in that!
Plenty of us have known about, or suspected, land banking for a long time. Nor is it just supermarkets. Many big housing developers do the same and effectively control a lot of the housing supply.
But would building more supermarkets create more competition? The evidence from places where they are close together does not suggest much, if any, price benefit. And that prompts one of two thoughts: either there is price fixing, or prices have already been driven down to their free-market level. Which one applies is open to conjecture.
Since it is the housing market where prices continue their meteoric climb it might be more useful to address land banking in that arena. Trouble is, of course, that any government that produces a sustained fall in property prices is going to become very unpopular with a lot of younger people who suddenly find themselves in negative equity.
Thus government finds itself facing, yet again, the choice between doing something real but predictably unpopular versus doing something that has the patina of firm government but little hope of real outcome.
Plus ca change. Plus la meme chose.
Three things bother me about this report.
Firstly, why were so many small suppliers so reluctant to give evidence? One might presume that they fear the loss of their supermarket contracts if they did, or worse, they had been threatened with the loss of their contracts if they did.
Secondly, the murky practices of back payments and up-front payments prevent fair competition from smaller suppliers. From what I've heard the practices are widespread and dictatorial. (Of course few small businesses were willing to talk about it on record. Why doesn't the ´óÏó´«Ã½ do some anonymous interviews?)
Lastly, landbanking is a problem whichever way you look at it. For a community to have permenantly undeveloped areas is dispiriting at best and attracts crime at worst. On the face of it it appears as a legitimate exercise than companies in many sectors indulge in, but the scale of it with the supermarket sector is too large to be allowed to continue.
I think that, between the lines, there is a lot to worry about in this report.
I see that, as usual, the British people and the ´óÏó´«Ã½ are following there usual anti-business, and anti-success doctrine. These companies employ 100,000s of people, and pay £100s millions in tax to the government each year.
I see people complaining that they are causing the destruction of the small local shop, but it is not these companies that cause this, but the consumer, who does not support them, as it is they who ultimately decide.
Do we live in a totalitarian state where we are forced to shop at one of the big four, I think that you will find that we do not. Though it does seem from reading the comments of other contributers that, that, is what they want.
Anti-business, and anti-success the British way of life.
Hi, well in Watford we all believe that all the land around tesco is owned and leased by Tesco. It was all brought off Benskins Brewery years ago.
But I don't think it is such a bad thing. (Well in our town at least)
Before they came it was all waste land and not a nice site to drive through. (old wrecked benskins buildings)
On the land they have built appart from a huge tesco, a big retail park which has many big companies that do sell similar lines to tesco. (I.e Borders, All Sports, Boots.) Certainly not anti-competitive behavior from what I can see.
You want a "label" ie. Adiddas thats six months old then you go to tesco. If you want brand new latest design you goto allsports.
You want a chart CD you goto Tesco, you want a specific CD of an artist you love you goto Borders.
The Competition Comission report is biased. Why? Because it is only reporting on competition between the Supermarkets, not the rest of the High Street. Yes more Supermarkets will encourage more competition between them, but it would signal the death of every single local retailer.
We need a competition Comission that will rein in the Supermarkets properly by seeing how they destroy the competition amongst local shops, not each other.
No!! Don't let it happen. Any encouragement to build these horrible massive superstores will rip the heart out of town centres. This is what's happened in my home country of Canada where nearly every city and town with less than 500,000 people has lost the heart of their community to this fringe-developments on the outskirts of town. Now everywhere you shop is a giant car-park with massive superstores scattered around. Not very pleasant.
One of the reasons I moved to the UK was the character of towns - and be warned - this will be destroyed if you allow further development to happen.
It's obvious these supermarkets are now beyond the law. They're just too powerful for any democratic authority to take on - except for perhaps central government. And if central government does ANYTHING whatsoever to them, they'll start whining and bleating about how "unfair" it all is.
To paraphrase Chavez on oil companies: yes, supermarkets are good and useful, we want them - in their place! Not taking over the country, imagining they can do what they want - because they can.
Do we need an enormous Tesco in Partick, where there's already a Morrisons, a Sainsburys and hundreds of small shops? How about a park instead (along the river)? Some place for kids to kick a ball around? Affordable council housing?
Sorry, I forgot. Tesco is one of the few citizens of this country. We people are not.
The problem is oligopoly not monopoly. Is there really enough trade to support the presence of all of the big four supermarkets in every locality?. Even if Supermarkets were willing to invest in building new stores in areas were they faced serious competition would they really make that sort of investment if the stores viability was far from assured?; and what if they did, naturally there would be winners and losers and wouldn't this just lead to an even further concentration of oligopoly or perhaps even total monopoly of the supermarket sector.
Far more likely I think that the Supermarkets will carve up the territories like a mob of fat fingered Capos in the backroom of the 'Badda Bing', keeping expensive and resource sapping turf wars to a minimum.
The best way to challenge supermarket dominance and all the associated negative implications is to offer people a genuine competitive alternative to shopping there and in my mind providing access to the market for small locally based business' is of paramount importance.
I live in the county town of Wiltshire, not the biggest town here, but getting bigger with a few developments getting underway.
With a town this size, is it really normal to have a 24hr Tesco, and 5 Tesco expresses? One of which is about 1000 metres away from the 24hr store!
2 of these Tesco Express are not allowed to have the "Tesco Clothing" (livery) on the outside, as "they don't want to give the impression that there are a lot of Tesco stores in the town". The thing is, you go through the door, and everything inside is Tesco branded!
Thankfully, we have an Asda, but that is the only competition. Would be nice to have a choice other than Tesco, Tesco, Tesco, Tesco, Tesco or Asda!
I do understand the need for Tesco to get into the "convienience" store market, so they aew able to trade for more than 6 hours on a Sunday. If this was to change, would Tesco still want all these little shops?! I don't think so!
I live near Swansea and Tesco have three huge stores here at the moment and they want to open yet another smaller one again, it is about time that something was done about the number of shops that one chain is allowed to open up in one area, people should be able to pick where they shop :ie Tesco Asda, Sainsbury's
Morrison's or elsewhere if they want to. Councils need to stand up and say no you are allowed one store and that is that, and give someone else permission to build a competitive store in the area to encourage competition instead of having one huge trader grabbing everything to stop and if they don't like it tough.
The supermarkets aren't the only major culprits. BP has recently sold off a lot of forecourts and (from the paperwork I saw) severely restricted the future use of the sites through covenants to prevent anything even remotely resembling competition.
The competition Commission have missed the point. Supermarkets do not compete against each other or operate in the consumer interest. This can be evidenced by the recent egg price rises. Of the 40p plus per dozen increases seen on Supermarket floors and justified by recent grain price rises, less than 10p per dozen reached the producer, who actually incurred the cost.
Tesco & ASDA matched increases on like for like egg offerings. Competition, what competition more like a cartel.
Land horded by supermarkets near their existing units,amounts to a fair chunk of property all over the country. Should be used to provide condominium or other accomodation with facilities, the convenience of a large store near by. Retired people single individuals et all at a reasonable price for the benefit of the people and the nation.
Until the customer starts putting quality, freshness, etc. above the ceapest possible price the biggest is best stores will continue to domminate the market place and the High Street to die. The other problem is lack of time, with everybody working, who has time for going from shop to shop.
I remember the National Bread Strike when local bakers fired up their own disused ovens and people re-discovered what bread should tast like. Even supermarkets had to start baking on the premises. Perhaps a strike of supermarket staff is needed to achieve the same for fruit, vegetables, meat and fish,
etc.
Pieter (#55) suggests that the character of our towns will be "destroyed". This is an oft advanced argument. Its proponents don't consider that the character of town centres could just change. Why is it a "destruction" if a town centre evolves to better meet the long term need of residents? Why does change automatically mean a reduction in quality?
I'm no big supporter of the supermarkets but, let's face it, many town centres would be all the better with some change. Any change.
I shop at Tesco as well as local shops but am under no illusion that they are abusing their market power.
Go into any Tesco, Sainsburys, Asda or Morrisons and you will see the charge exactly or within a penny the same price for many key staples. Tesco actually put these prices on the shelves, saying they charge the same but give clubcard points!
They should be investigated for anti-competitive behaviour. It seems to be collusion. Otherwise how do they align prices so exactly?
BA were fined millions for even discussing collusion - why are the supermarkets apparently untouchable?
I'm old enough to remember the pre-supermarket pleasures, many say they prefer. Oh yeah? Trudging from grocer to butcher, then greengrocer and baker, a relentless grind stultified with the expectation of high cost from artificially inflated Resale Price Maintenance(RPM). Rip-off Britain was sustained by fragmented, inefficient, small businesses and enforced by resort to law, at the expense of victims called customers. It took Tesco to smash this conspiracy against consumers and I for one will remain grateful to supermarkets for protecting consumers against rapacious suppliers, bleating about market forces. Tough, get used to it, consumer is king, remember?
We need more supermarkets like we need a hole in the head.
Let's just look at the US, shall we. They have loads of supermarkets. Most of them empty most of the time. So how do they make money? By bullying suppliers.
There are some isolated towns/areas of the country that are underserved. Yes, we should do something to correct the anti-competitive behaviour that the supermarkets use in these places. But we should be careful not to provide a solution that creates an even bigger problem.
Slough is talked about a lot as an example of Tesco's bad land behaviour. But there is an Asda and a Sainsburys there too. So it's not that bad.
Online shopping is more environmentally friendly and we should be encouraging it as much as possible, maybe even subsidising it. The competition is much more free in the virtual world and the demand for land for supermarkets would naturally drop (they need less sq ft to serve internet customers than 'real' customers).
Not sure a tax on undeveloped land would work. The company I work for owned a site that could not be developed for 20 years due to the intransigence of the local authority. Would this be the same local authority charging a tax on the undeveloped land??
To add something to comment 23, not only did Tesco build on a new site in Carmarthen, the local council also let them take a large portion of the town park to build it.
Sunderland also has issues with Tesco, as it owns the land on which the VAUX brewery used to stand. Having been denied planning permission for a huge Tesco's in the middle of the city centre, they refuse to release the land and numerous regeneration plans for the vast eysore it has become have been scuppered over the past five years.
In Petersfield Hampshire we have a very good Waitrose in the centre of town which encourages shoppers to spend time browsing the High Street. There is also a small M&S selling food only right on the high street plus a Tesco Express near the station. There are not many butchers left (one) and no greengrocers but the high street is vibrant with lots of different shops.
We have a medium size Tesco further out which now wants to get much bigger by taking over some land from the school next door in exchange for some sweeteners (money basically).
This is typical Tesco - do and say anything to get in and then chip away until they get what they want irrespective of the wishes of the town. Of course the school management are on their side because they will get a new sports pitch!! Very blinkered and short-sighted.
There are countless other stores within 10 miles - Asda, Sainsbury, more Tesco (large and corner), Morrisons etc.
There is a monthly Farmer's Market which is great but my view is that we need less supermarkets and more food grown and sold locally.
Supermarkets provide the ""All in one shop" facility that most people seem to prefer. I live in a matket town in Hertfordshire I shop in the town high street and local market on Saturdays for bread, vegetables and use a local farm butcher for meat, poultry and eggs - this takes me all of Saturday morning and I work full time. We also have a small M and S foodstore. However for the boring loo roles, shampoo, prescriptions, ice cream etc etc I tear into our local Sainsbury's (or the larger one en route from work) after work on Friday at 18.00 and am out again by 19.00. Sainsbury's is the best Supermarket in my opinion. I try not to buy out of season foods and do support the local shops and businesses in our town - I can buy clothes for all the family - furniture - fabrics everything we need. The supermarkets do create jobs and training opportunities - surely its about balance in the community and for individuals to decide what is most appropriate for them.
Rob....
your a genius at writing/explaining the most difficult complexitities of our global financial markets into, good, clever, intelligent prose...
I teach english in Argentina... and I use quote you every day, when teaching financial instruments, global markets... why's and how's... and what if's....
thanks for your writing and its depth... you are helping 1000's of people learn "real business english!"
...you are a credit to the UK and the ´óÏó´«Ã½!!!
We'd likely still be in the dark ages of inaccessibility without superstores. Whilst reluctant, I am resolved to use them because they let me shop at the inconvenient times I like to (sometimes 4pm!) I wouldn’t wish ever to lose that and exasperate at how this country could not view most of what the superstores provide as progress. I also consider that it wasn’t the 'local trader' that gave us long open hours, seven days a week. If I could pop down to my local, truly trader-owned shops for some decent fresh meat, veg, some dessert, cheese and wine absolutely anytime on a Saturday, then I would. But, too often I find that the local trader has, frustratingly for me, departed home by 2pm if not noon. Additionally, as much as I strive for the UK to be as culturally vibrant as most of Europe appears, I fear that embarking on such a move would result in the opposite - and much worse, limited selections of expensive food!!! Comments on postcards to G.B. at No. 10.
This report mentioned that the Competition Commission was considering a fairness test for new superstores but neglected to mention that the Planning Bill currently going through Parliament will remove the existing needs test applied to out of town developments.
There was also no mention of the recently passed Sustainable Communities Act which might help us to protect local shops.