Retail: High Street Attacks Tesco Take Over

The row over Tesco’s effect on local markets comes as the Competition Commission’s inquiry into the grocery market examines the effects of dominance of the ‘Big Four’ on local markets.

In the report, Tesco identifies Downham Market in Norfolk and Ludlow in Shropshire as locations where “Tesco stores have been demonstrably good for the high street and neighbourhoods.”

However, in contrast, local retailers serving these communities claim that the arrival of Tesco has undermined consumer choice, and several have spoken up about the anti-competitive treatment they have received at the hands of the retail giant.

Independent retailer, Nigel Dowdney, owns a shop in Norfolk near Downham Market, and has experienced the threat to his business and local community that Tesco brings. He says, “The detrimental effect that Tesco had on the town centre was apparent immediately. Within weeks of the actual opening the local Co-op closed and then a variety of food and non-food shops started to disappear many of whom had operated in the town for decades. The latest business to cease trading, last month, has operated in the town for the last 43 years.

“We have proven a reduction in footfall in Stalham town centre of in excess of 55% overall and in some parts of the town of up to 90%, since Tesco opened. I no longer believe their corporate statements and would say that it is far safer not to.”

In January this year, Harry Tuffins Supermarkets opened a new 3,000 sq ft forecourt convenience store in Ludlow. To coincide with the opening on the 19th January, Tuffins offered 10p off a litre of petrol if a customer spent £60 in store. Tesco, which has a 20,000 sq ft store in the town, then sent two vouchers to all residents within a 10 mile radius of Ludlow offering £10 off any shopping over £30, and the promotion was timed with the opening of the new Tuffins store.

Paul Delves, managing director of Harry Tuffins, said, “Tesco can sometimes help to regenerate town centres as they did originally in Ludlow, but I think the debate should now be about the possible sheer domination of them in areas which are perfectly well served already.”

Similar local vouchers and pricing activity in Withernsea, East Yorkshire, was previously highlighted by independent retailer, Ian Proudfoot.

James Lowman, chief executive of the Association of Convenience Stores (ACS), said, “In their latest review, Tesco claimed to be a community friendly retailer working to benefit local people, yet the reality of both case studies is very different. These are examples of excellent retailers competing with the multiples but facing unfair competition, not due to any failings in their stores, products or services, but as a direct result of the aggressive strategies of this dominant national supermarket.

“The Competition Commission should not be taken in by these very general statements. They need to look at the evidence on the ground and the effects that superstore development can have on consumer choice.”