Leading Article: How to buck the market

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EVEN THE marauding horde of anti-capitalist demonstrators who caused mayhem on Friday in the City could not tarnish what had undeniably been a good week for financiers. The American retailer Wal-Mart had just announced a deal to buy Asda. Wal-Mart is the darling of Wall Street with 3,600 stores throughout the United States, stocking any product you could want and many you couldn't possibly. Its success has been built on that most sound of retailing principles - selling goods cheaper than everyone else. The prospect that Asda will benefit from Wal-Mart's proven savvy, not to mention the extravagant fees the deal will generate, had the bankers celebrating even as the angry mob smashed their windows and trashed their cars.

A good week for consumers, too, on the face of it. Britain's supermarkets are under investigation by the Competition Commission, in line with the Government's concern that British shoppers pay more for their staple goods than their American and European counterparts. As if by magic, along comes Wal-Mart to bring Tesco, Sainsbury and Safeway into line. Well, not quite by magic, perhaps. After all, it is only four months since Wal-Mart representatives flew to London for a date in Downing Street. It is hardly cynical to suppose that the subject of the company's expansionary intent in the UK cropped up between the tea and cakes.

Friday's demonstration was arranged long before Wal-Mart's plans were revealed, but, from the point of view of the organisers, the timing was perfect. When better to mobilise the forces of the radical left than in a week when the apotheosis of American consumer culture started marching on Britain?

Of course, Wal-Mart has not become the world's biggest retailer without upholding the twin principles of shameless materialism and, some would say, heartless capitalism. But there are those who resent its designs on Asda for no better reason than that it is American. Knee-jerk anti- Americanism is tiresome, and in this case it obscures the undeniable benefits that will accompany Wal-Mart's arrival. It will bring lower prices which our indigenous supermarkets will have to match to survive. What is widely regarded as a cosy cartel of grocers will be transformed into a buyer's market.

But there is a downside. Almost as rapid as Wal-Mart's expansion in the United States has been the growth of an opposition movement bent on blocking the opening of further stores. These opponents point out the company's tendency to build giant stores on the outskirts of small towns, driving competitors out of business and destroying existing jobs. It is no coincidence that, of the UK's big four supermarkets, Wal-Mart chose the one with a northern bias where existing shops will find it most difficult to compete. Environmentalists are also concerned. Although the Government insists that planning rules restricting new out-of-town retail developments will remain, few believe that Wal-Mart will be content with Asda's existing sites.

Shoppers might also consider how Wal-Mart has managed to undercut its rivals so consistently. Allegations that it uses sweat-shop labour have dogged the company. Despite its self-styled image as an all-American company, its imports from China are huge. Critics condemn the use of part-time staff which relieves Wal-Mart of responsibility for their health insurance. All charges which the company would deny, no doubt.

These minutiae will not concern the many who will be delighted when Wal-Mart's bargains become available over here. But the social cost of the bargains could be far too high. Belatedly, Britain has begun to exercise its consumer muscles by demonstrating its concern about genetically modified food. If we really are concerned about the potential social, economic and environmental impact of huge out-of-town stores, then we can deploy our wallets and purses to make the point. These weapons pose a far greater protection against the excesses of big business than the bricks and scaffolding poles wielded by the demonstrators on Friday.