Were we too quick to judge Tescotown?

05/02/2009

We report on a recession that has seen us all become kings of convenience...

by Adam Forrest
Now the days of reckoning have arrived, and the recession has scythed through the housing market and the high street, growth has taken a back seat to survival. Retailers across the country have binned their big ideas, with many employees left wondering if next month's wage slip will be their last.

If most of us are cowering in darkened corners until the worst passes, a few behemoths still walk tall. In recent weeks, Britain's biggest supermarkets have announced plans to create around 30,000 new jobs. Coming at a time of widespread cuts and closures, the expansion plans have been greeted with unabashed good cheer by politicians and the news media.

The big four - Asda, Tesco, Sainsbury's and Morrisons - seem to be recession-proof, with profits rising and stores multiplying. Puffing out its chest, Tesco has stated its intentions to create 10,000 new jobs and add around two million square foot of new retail to its portfolio space this year. "We want to keep on growing," enthused company finance director Andy Higginson. Professor Leigh Sparks, head of the Institute for Retail Studies at Stirling University, believes the job announcements are happening against a "battleground" of expansion among the big four.

Although this will involve completing huge, often contentious, shopping complexes, Sparks says supermarkets are the logical inheritors of doomed independent retailers in the old town centres. "There's so much retail space opening up, both in the high street and out of town. "As stores become empty, the supermarkets can pick them up."

The purchase of stores in Lerwick, Kirkwall, Stornoway and Ullapool last year meant full spectrum dominance for Tesco - Scotland now has a branch in every one of its postcode areas. In fact, Harrogate is the only postal district in the UK left to be filled. But that corner of north-east England is not the only place with residents and shopkeepers unimpressed by Tesco's ongoing success.

The company's interest in expanding its smaller Express stores on the high street may be because so many of its larger projects have become bogged down in disputes with anti-Tesco groups angry about the ruination of green space, local retail and architectural diversity. In Paisley, yet another huge Tesco proposal is awaiting approval, pending Renfrewshire Council's study on its potential impact on smaller retailers.

Jimmy Kerr, of the Stop Tesco Owning Paisley (STOP) campaign, is even more fearful the big four will have their way if the next couple of years are as bleak as expected. "The recession is an opportunity for aggressive expansion," he says. "At times like this, councils will be keen to green-light big investments. Local planning policies prevent these mega-developments, but councils are saying material considerations of the here and now outweigh policies. It's happening up and down Britain."

Kerr is keen to stress there is a flipside to Tesco's talk about creating much-needed employment. "It'll kill off the town centre at a time our local businesses need help," he insists. "They can talk about new jobs, but they'll be off-set by people getting laid-off elsewhere.

"People in politics are desperate to look good; any headlines about new jobs will be seen as good news and the disadvantages get suppressed."

Yet if jobs are being lost across so many sectors, can we afford to turn our noses up at any bulk batches of job openings? The service industry may not offer the most glamorous of prospects, especially at checkout-aisle entry level, but in many places across the UK, routine work is better than none.

Asda is particularly proud of its employment record and last week proclaimed the 7,000 jobs expected at new stores this year to be part of an ongoing project to provide opportunities to people who have enjoyed very few.

"At a time when many companies are having to lay people off," said Asda chief executive Andy Bond, "we will also be helping 3,000 long-term unemployed back into work by targeting them for existing vacancies in our business." Some of the jobs will be part-time, but a precentage of the employees will be sourced through Remploy - a charity helping disabled ex-servicemen back into work.

Sainbury's, Morrisons and Waitrose are also boasting of several thousand new jobs, but how valid is the emphasis on "new"? According to Professor Sparks, it would be unwise to think 30,000 people will be moved off the dole and into work this year. "If a new Asda opens up in direct competition to a Tesco, then Tesco might have to lose some employees in that area," he notes.

"That competitive battle means the net growth is not going to be as high as suggested. You also get adjustment of workers' hours, because there are a lot of part-time jobs. Clearly, that's a problem for individuals involved because they get paid less."

As well as low-paid and unsecure jobs, there is a wider range of duties at today's supermarket than scanning barcodes and stacking shelves. Tesco is planning to launch an online fashion store devoted to selling its own labels, trying to replicate the success of discount clothing websites that have boomed since the credit crunch. Asda expects to widen its range of Living brands, adding home goods and kitchenware to its George clothing label.

Supermarkets now account for more CD sales than music stores. They are becoming one-stop pods where almost all of life can be carried out in air-conditioned ease. To those clinging to the idea of diversity, this vision of all-encompassing mega-markets has a nightmarish, dystopian hue.

Friends of the Earth has detailed its opposition to the land-grab practices of the big four in a report entitled Shopping the Bullies, while anti-poverty group War on Want continue to highlight the supermarkets' reliance on sweatshops in the developing world and campaigners at the New Economics Foundation warn about the dangers of "clone town Britain", arguing street markets and smaller shops keep more money flowing in. The British public are spending less  on eating out and may become not so fussy about food miles, healthy eating and locally sourced organic produce.

"Do these things have a lower priority in consumers mind at the moment?" asks Professor Sparks. "I think the answer is yes. If you look at sales of organic, they've gone down quite quickly."

Stephen Robertson, director-general of the British Retail Consortium, has little time for hand-wringing. "Supermarkets have a really good record on employment practices and they've been innovative in bringing things like organic produce to a wider market, to the benefit of many local suppliers."

Daily Telegraph leader writer and blogger Alex Singleton has taken up the theme in his attack on the small-is-beautiful brigade. "Ideological opposition to supermarkets is fine for affluent middle-class intellectuals who find global capitalism terribly vulgar," he states, "but for millions of hard-working Britons, supermarkets are a godsend."

The battle of ideas will come round again, but there's a recession out there and Britain is getting a big shop in to see it through the bad times.