Sainsbury, Tesco, Safeway and company are supposed to be food shops. What has all this activity to do with food? Not much, is the answer - but it has a lot to do with changing consumer habits, and the money that can be made from them.
Few retail analysts will have been surprised by yesterday's announcement of large-scale redundancies at Northern Foods, Britain's biggest milk- processing firm, or the news that Dewhurst's butcher's chain of 300 high- street shops has been placed in receivership. The circumstances of the two cases vary - Northern Foods, for example, is partly a victim of the botched deregulation of the milk market - but there is a common, underlying theme: the irresistible rise of superstore shopping.
Many of us talk about the importance of the small shop, but when the conversation finishes we climb into our cars and head for the superstore. There are a number of reasons for this. Smaller shops, in many cases, have limited product ranges, dowdy decor and nowhere to park your trolley or your car. A superstore has a vast, free car park, a range of around 15,000 products, bright lights, soothing music and lots of alluring purse- lightening displays: Sainsbury, research has shown, is particularly adept at extracting more from us than we intended to spend.
Supermarket shopping, in other words, is an experience, and a rather solitary experience at that. Walking down the high street with your shopping basket was an expedition: it was also a more sociable, neighbourly affair. Unfortunately, it was rather time-consuming - and time, increasingly, is at a premium. Studies by the Henley Centre have found that the white- collar classes spent 2.53 hours per week grocery shopping in 1986. By 1993 this was down to 2.1 hours - a cut of 17 per cent. Working women spend 2.93 hours a week grocery shopping, non-working housewives 4.56 hours. In an age when work hours are lengthening, and women have moved into the workforce to stay, "one-stop shopping" makes a lot of sense.
Hence the cutbacks at Northern Foods. Part of the company's troubles stems from the deregulation of milk last November, when effective control over Britain's milk supplies passed to Milk Marque, a voluntary farmers' co-operative representing 65 per cent of Britain's farmers, which immediately put up prices by 10 per cent. In reality if not in name, Milk Marque is a monopoly - but without a regulator (there is no Ofmilk). The price rise meant that Northern Foods was paying 8 per cent a year - about £45m - more for its milk. However, it might have escaped unscathed had it not been for the supermarkets.
Northern Foods' doorstep milk deliveries have been hit by the rise of the supermarket pinta. By the end of the decade, on present trends, the doorstep pint could have vanished. Supermarket milk is much cheaper - up to 10p a pint - not least because milk is often used as a "loss-leader", an item priced below cost to draw people in. If you're already a regular supermarket shopper, why have more expensive milk delivered to your doorstep?
From the consumer's point of view, therefore, "one-stop shopping" makes a certain sense. From the supermarkets' point of view, it is a dream. First, profit margins are relatively high - up to 40 or 50 per cent on clothing, for instance. Second, there is enormous potential for growth. A recent report from the City firm James Capel found that the big supermarket chains have a 75 per cent share of the £55bn food and drink market but only 11 per cent of the similar-sized non-food market. Doubling this share could add £5bn to grocery sales, said the report, which predicted a "major assault" by superstores on non-food areas.
Should this happen, then the list of high-street casualties will extend far beyond butcher's shops such as Dewhurst - and all the thousands of small grocers that have vanished in recent decades - and into the many thousands more florists, newsagents and booksellers that now add vitality and autonomy to town centres. After years of laissez-faire planning, the Government has recently woken up to the collapse of the high street and introduced new planning rules designed to curb out-of-town development. Yet even if these succeed - and in many cases they are clearly too late - they do not address what is perhaps the central question about the supermarket chains: monopoly power.
In the retailing world, as in just about all others, big is increasingly beautiful. A recent report from the Institute of Public Policy Research pointed out that the market share of the multiple grocery chains (those with more than 10 stores) has risen from 24 per cent in 1983 to more than 50 per cent and is forecast to rise to 70 per cent by the end of the Nineties. In many areas of Britain, according to the IPPR, an individual superstore will account for more than 25 per cent of local sales - the usual definition of a monopoly.
Yet this only mirrors a global trend. Last year, the consultancy firm Coopers and Lybrand looked at the likely shape of retailing in the next century and concluded that retailers "must become world class in order to compete with the global leviathans which will grow to dominate world retailing ... . It's great for the consumer who will reap the benefits of this shopping revolution but a frightening scenario for the retailer who cannot get to grips with the implications of being in a global market."
The Government clearly agrees that on a global stage, big (particularly when it's "British") is good - hence its sloppy record on enforcing competition policy within Britain. But is it really such good news for the consumer? However responsive and customer-friendly the superstore managements may be, do we want them making all our choices for us? Do we want to see the proceeds of our purchases, and the power that goes with them, concentrated in an ever-diminishing number of distant and imperfectly elected boards of directors? The paradox is that consumer choice, freely exercised, appears to be leading inexorably to its own negation ... a point worth pondering on your next one-stop shop.Reuse content