The All-Parliamentary Small Shops Group will today publish a report arguing that the supermarket chains gain an unfair advantage over other retailers in all sorts of underhand ways, and that a "supermarket regulator" is needed to keep them in line. We should take all this with a pinch of salt. This organisation of MPs is essentially a lobbying group for small retailers. Yet today's report is useful in the sense that it draws our attention to the wider issue of supermarkets and their growing influence on our national life.
There is a growing body of opinion which says that this influence has been abused. Supermarkets are accused of using their control of 75 per cent of the grocery market to squeeze suppliers and farmers. They are held responsible for the closure of 2,000 small food outlets each year, and the decline of the high street. Part of the problem, of course, is Tesco. This company is, in many ways, a victim of its success. By achieving such dominance it has become a whipping boy for the sector.
Tesco has undoubtedly pioneered some of the more harmful practices of supermarkets in recent years. One example is the mass import of food. Supermarkets increasingly choose to fly in produce, even though much of it could be sourced locally. At the height of the British apple season two years ago, more than half the apples on supermarket shelves came from abroad. Importing fresh food by air is responsible for thousands of tons of fossil fuel emissions each day. It may be cheaper, but the environmental cost is immense. There are also legitimate concerns about the fact that so many supermarkets are still based outside towns, encouraging people to use their cars.
We should be wary of laying the blame for all this on the supermarkets, however. Other factors are also involved in the decline of the high street. Business rates are one example. The fact that so many charity shops are springing up (which are largely exempt from these rates) while other independent retailers are closing indicates that shops are too highly taxed. Town planning is also a factor. The recent decision by Barnet Council in London to prevent a Tesco Express store being built shows that local planning authorities are perfectly able to stand up to the supermarkets.
We must also be wary of jumping to the conclusion that the free market has failed, for all of Tesco's growing dominance. The increasing number of delicatessens, organic food shops and farmers' markets shows that the middle classes - often frustrated with the quality of fresh food offered by supermarkets - are voting with their feet. In time, supermarkets may find that there are limits to their expansion after all. The boom in internet home deliveries also has the potential to change shopping habits for everyone.
The role of the Government is to facilitate, not interfere, with the free market. We must recognise that the reason the likes of Tesco and Sainsbury are so successful is that people like shopping in their stores; there is a genuine consumer demand. But the market cannot be unfettered. There are reasonable measures the Government could take to improve matters, such as a tax on air fuel. This would force supermarkets to think twice about importing food and would also encourage them to use local producers. A tax on supermarket parking also has its merits from an environmental perspective.
Blind opposition to the big chains is futile. Supermarkets are here to stay. The problem that MPs and activists ought to be grappling with is not how the influence of supermarkets can be rolled back, but what can be done at both national and local level to make these retail behemoths act more responsibly to the benefit of everyone in our society.Reuse content