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EDITOR’S BLOG: Top of the shops

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18/04/2007

The latest financial results from Tesco provide all the ooh-ah-inducing, eyebrow-arching figures you’ve come to expect from the UK’s biggest retailer.

A 13% rise in pre-tax profits to £2.55bn (ooh-ah): group sales up 10.9% to £46.6bn (arch, arch): more than 8.2 million square feet of additional retailing space created overseas (ooh-ah): plans to create 25,000 new jobs worldwide this year, and so on and so forth, ooh-ah, arch, arch, pull the other one etc. At the end of the day, we spend £1 in every £3 of our national retail grocery bill in Tesco and that’s, well, enormous.

But things were not always like this for Tesco, and you have to take your hat off to an empire that began with a Jewish bloke, Jack Cohen, setting up a stall in the East End of London in 1919 flogging ‘surplus’ groceries, although quite what they were in those hungry days beats me. Anyway, he turned over £4 that day and made a quid profit, which was pretty good going for a brand-new business and, as the saying goes, he never looked back. The first self-service supermarket opened in 1956 in a converted cinema in Maldon, a small seaside town in Essex.

Not everyone is happy, though, with the shop that Jack built. Friends of the Earth, for example, that doughty band of environmental warriors who try to warn us off our self-destructive ways, have a rallying call they want us to hear: “Curb the power of the Tesco juggernaut.” Campaigner Vicki Hird says in support of this ethical battle cry: “The supermarket giant’s market dominance is bad news as it allows it to dictate conditions to suppliers and to drive High Street stores out of existence.”

And there’s plenty who agree with that. In Sheringham, North Norfolk, plans to open a Tesco have met with strong reaction from both pros and antis. Foremost amongst the antis is James Wright, a director of High Street ironmongers, Blyth and Wright, which has served the town for over 100 years. “I don’t want to see Tesco in Sheringham,” he thunders. “Tesco is too big and I do not want to see a ruthless company like that spoil Sheringham like it has spoilt everywhere else.” Strong words, although I suppose you can see his worries about the ironmongery trade in the area sloping off to browse the neon-lit, air-conditioned aisles dedicated to ‘Household Hardware’ in the new store, if it arrives.

In the vanguard of those wanting it to do just that is businesswoman Pam Blyth, who notes that “things have been getting quite nasty” in the battle to control where North Norfolk residents spend their money. “This is not to do with Tesco, it is to do with the town,” she says. “Tesco is not an ogre we are trying to hold back. If a business stands still it will go down, and a town is the same.”

I suppose Sheringham is undergoing in miniature what has happened to the UK since the 1950s when Jack Cohen opened his Maldon store. Put bluntly, this site is called ‘Your Money’ and there is a battle royal going on out there to determine where you spend it, so it becomes THEIR money. The big supermarkets, including Sainsbury’s, Asda, Waitrose, Somerfield and M&S, all want you to part with your pennies in exchange for THEIR peaches and pizzas – and they are pretty ruthless in pursuit of this aim.

Struggling alongside them, the small independent retailers fight for a declining share of the market, and there is a lot of misty-eyed nostalgia for the days of the village or corner shop where everyone knew everyone and the owner would close for an hour for lunch and take a half-day off on Wednesdays.

But life isn’t like that any more and we have decided to spend our money in places that are convenient, pleasant to shop in, open all hours, and offer excellent value for money. 

Then there is the bonus that there is real competition between the big multiple stores, to keep them on their toes, which is more than you can say for the old village shops. So good for Tesco that it has 31.2% of the UK grocery market (arch, arch) and well done on that £2.55bn profit last year. Ooh-ah indeed.
 

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