Tesco 'ruining towns and stifling choice'

Tesco is descending like a black cloud over Britain's towns and cities, stifling choice and fostering a sense of alienation: those are just some of the claims made in a new book about Britain's biggest supermarket.

Tescopoly, by Andrew Simms, an economist, charts the rise of Tesco's " pile it high, sell it cheap" approach and damns its ethos, methods and influence.

Tesco is depicted as a megalomaniac company that mistreats suppliers and rivals, manipulates planners and helps create "clone towns".

With annual profits of £43bn, Tesco takes almost one-third of food spending in the UK but its expansion is being opposed by a varied army of campaigners.

A website, Tescopoly, founded by the environmental pressure group Friends of the Earth, the charity War on Want and other organisations, aims to co-ordinate local campaigns.

In an independent book of the same name, Mr Simms, the policy director of the New Economics Foundation and one of the site's founders, argues Tesco has a pernicious influence on society.

He claims the company's focus on cost-cutting harms the environment and worsens conditions for workers, yet only sometimes passes on low prices to its customers. He restates the finding of a Competition Commission inquiry which said, with other big supermarkets, Tesco engaged in anti-competitive behaviour, such as undercutting small shopkeepers and adapting prices to local competition.

He provides examples of where Tesco has obtained a dubious advantage in the planning process, such as in Stockport, where it built a much larger store than agreed with the council.

Instead of expanding choice, he claims big supermarket chains kill offvariety and offer "choice paralysis": endless aisles of " food remotely mass-produced and stripped of cultural context".

In the book published next week, Mr Simms discusses a survey in The Grocer that found 56 per cent of Tesco customers were "bored," 53 per cent "stressed" and 52 per cent "frustrated" by their experience. He warns that if Tesco and other big stores succeed in homogenising retailing, shops will become a succession of "faceless, soulless big-box out of town shopping parks".

"Today the public relations departments of the big stores will try to convince you that they are concerned about the environment," he writes. "But the supermarkets' real obsession has changed little: to extract the highest margin from a price that shoppers can be persuaded is 'low'. This book argues ... that where prices at the point of sale are genuinely low, this has been made possible only by passing costs on to someone or something else, such as the environment or wider society. In other words, there is a high hidden cost to 'everyday low prices'; instead of 'every little helping', somewhere it is actually hurting."

Tesco said that, although it had not seen the book, publicity suggested its claims were "misleading and out of date". Tesco stores attracted customers who also "used local shops and amenities" and town centres would continue to thrive, it said. Stockport was an "isolated" example, and Tesco operated a "national pricing list". Below-cost selling was only a small proportion of sales. Tesco also insisted it stocked more Fairtrade lines than any similar retailer.

"We expect the current Competition Commission inquiry to find that the market is competitive and continues to bring huge benefits to consumers," said a spokesman yesterday.

Tesco in numbers

12 Countries with stores (Britain, Ireland, Poland, Czech Republic, Hungary, Slovakia, Turkey, China, Japan, Malaysia, Thailand and South Korea)

979 Global stores in 2002

2,672 Global stores in 2006

20m British customers weekly

£43bn Sales in 2005/06

£2.2bn Profit in 2005/06

30% Share of UK grocery market

£3.9m pay for Sir Terry Leahy