For several years small town centre retailers have been blaming Tesco for all their problems, claiming that Tesco drives them out with unfair competition and ultimately hurting the consumer. Friends of the Earth have also insisted Tesco is evil and we should all support our local shops.
Eventually after vigorous campaigning small shopkeepers forced the competition commission to look at the conduct of the supermarket chains including Tesco. They complained that the supermarkets were abusing their market power, squeezing suppliers too hard and selling goods at a loss to drive small local shops off the high street.
The Economist reports that the commission recently found that:
- Where many campaigners see cause for alarm, the regulator sees consumer choice in action. It believes that the increase in the number of big supermarkets has been good for consumers, on the whole. Food prices have fallen a real 7% since 2000, choice has widened as some 2,000 new products have been added to the shelves each year and most people in Britain live a short drive away from at least one large shop.
- That many of the benefits to consumers arise from competition between big supermarkets. The commission’s concern, it turns out, is not that there are too many supermarkets, but that there are too few.
- They also found evidence that supermarkets don’t hurt small local business as much as is often claimed, and possible not at all. Lobbyists for small shops argue that their number is falling rapidly, the commission however found a 70% increase in the number of convenience stores between 2000 and 2006, with more than half of the new ones being independently owned.
- When a new supermarket enters an area, the number of small grocers typically falls, however the number of bakers increases, while there is no discernible change in the number of butchers, fishmongers, delis and health-food stores.
Whether these small businesses would survive a second supermarket opening up nearby is much less certain, but it seems that small retailers and their lobbyists have shot themselves in the foot and may well find out soon - to their peril.
Personally I’ve always felt that there are plenty of ways for a small business to beat Tesco.
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The grocers and fishmongers round here closed a long time before Tesco turned up with their Express store. I went into the main Tesco store for the first time in ages a month or so ago and it was awful. There were so many people there that it was a case of constantly trying to avoid trolleys. They might have everything you want in there including clothes and electricals but unless you go regular you’ll have no idea where anything is. I’d rather stick to smaller shops which don’t involve a mile trek to the cheese counter.
I have to admit I don’t enjoy going to the supermarket either. The point however is that small local stores have to try to compete (and they can do so successfully) not just stick their heads in the sand while complaining about how “evil” Tesco is.
Fortunately locally we have a very good, small chain family run supermarket, which offers great local produce.
In reality it is unfair, but in busineess terms i would say it was survival.
Because if tesco don’t grow then they won’t be as successful.
Complaining about it, i don’t think, will affect anything that tesco do.But it aint tesco that chooses the customers,customers av a choice of there own so tesco must be the favoured if other chains or small family business/supermarkets are seemingly struggling to make profit.
Quite, if the businesses offered their customers a more compelling reason to shop with them than Tesco then they wouldn’t have a problem.