Tesco attacked in US for 'taking the Wal-Mart way'

Tesco is facing the threat of a Wal-Mart-style backlash from environmentalists and union campaigners in the US, before it has opened a single store.

The UK's largest retailer is readying bold plans to crack the US market and has lined up 100 sites for new "Fresh and Easy" stores, predominantly in the west of the country. The first openings are pencilled in for November.

But yesterday a left-wing think-tank launched a pre-emptive strike against what it says will be a business that exploits US workers, damages the environment, destabilises local businesses and brings no benefit to the local community.

The Urban & Environmental Policy Initiative (UEPI), in Los Angeles, warned that Tesco's record on corporate and social responsibility was not as rosy as the company's marketing efforts painted it. The authors challenged Tesco to live up to its rhetoric rather than "take the low road, the Wal-Mart way".

Bob Gottlieb, one of the authors of Tesco: Shopping for a Market, and also the author of Ten Reasons to Stop Wal-Mart, said: "Tesco doesn't always live up to its promises and we believe consumers should be aware of its international track record. Our report is the start of educating the public about the pros and cons of Tesco's arrival in the US."

Left-wing campaigners have damned Wal-Mart as a company which damages its local community, and Tesco has promised a new type of retailer, which will open stores in underserved, low income areas.

"We would welcome the opportunity to prove to customers that we stand by our promises to offer fresh, quality, affordable food, to be a good steward of the environment and a great place to work," a Tesco spokesman said yesterday.

The UEPI report argues that Tesco's modest early expansion plans are cloaking a grand design to topple Wal-Mart. It is critical of Tesco's plans to site its new distribution centre in Riverside, California, a "polluted region that the additional trucktraffic and its emissions of particulate matter will further turn into a type of environmental sacrifice zone".

And it says Tesco has so far refused to meet with local unions and will restrict the numbers of hours that employees can work so that most have to juggle second jobs to make ends meet. Tesco says most people will be full-time employees and there will be good healthcare and other benefits.

And in a major section of the report - aimed at policymakers and regulators - the UEPI criticises Tesco's impact on suppliers in the UK and other countries in which it operates.

"Tesco has maintained an abiding interest in exerting its power over its suppliers in order to maximise cost savings and production flexibility, particularly for its in-house products. Supply chain abuses, such as poor working conditions, food safety problems and environmental exposures have been documented by governmental agencies, non-profit groups, and the media," it says.

Tesco said it seeks to address supply chain abuses when they are raised.