The cartel they don't want you to drive

Supermarkets form an oligopoly that denies real consumer choice, argues David Nicholson-Lord
Click to follow
The Independent Online
It is a tribute to the success of supermarkets that many of us enter them with a moderate shopping list and leave with a bulging trolleyful of goods - and a lingering sense of bemusement at how it happened.

Sainsbury's, Tesco, Safeway and company have made an industry out of binge shopping, turning their knowledge of what makes us buy things into a market dominance that would have been unthinkable a generation ago. And the bigger they have grown, the more ambitious they have become.

The car is the latest addition to the goods and services you may shortly find in your nearest superstore. Korean motor manufacturer Daewoo is to open a showroom in a Sainsbury's Savacentre store at London Colney, just off the M25 in Hertfordshire. It is thought to be the first link of its type between a car firm and a supermarket chain. Almost certainly, it will not be the last.

For the ordinary impulse-driven shopper cast adrift in a glittering sea of consumables, there is at least a consolation that you can't fit a car into a supermarket trolley. For the motor industry and its comfortable - probably too comfortable - network of dealers, the move will ring warning bells. Since the Second World War, but more particularly since the start of the Eighties, the big grocery chains have cut a swathe through the small independent shops that once constituted the British high street. The decision to start selling petrol, and the ensuing price war with the oil industry giants, show that they are not afraid to take on the Goliaths as well.

But the Sainsbury's and Tescos of this world are Goliaths themselves now. Their annual profits regularly top the half-billion pound mark. A recent report by Tim Lang and Hugh Raven for the Institute for Public Policy Research found that the market share of the largest multiples had risen from 24 per cent in 1983 to more than 50 per cent, and on present trends would grow to 70 per cent by the end of the Nineties. In many parts of Britain, individual stores account for more than 25 per cent of sales - the usual definition of a monopoly. This success has been achieved, in part, because supermarkets give us what we think we want. They offer, through novel and "exotic" goods, the chance to experiment with our identity. They also offer variety, convenience and efficiency - big parks for our cars, 15,000-20,000 products to choose from, the opportunity to satisfy all our shopping needs in one trip - the so-called "one-stop shop".

In an increasingly harried age, the one-stop shop has an obvious appeal. The superstores, which we still mistakenly conceive of as grocery outlets, now contain books, newspapers, flowers, hardware, clothes, dry-cleaning and pharmacy outlets, coffee shops, hair-dressing salons and creches. And since the big chains have three quarters of the food and drink market, but only a tenth of the non-food market, it is in the latter sector that most of the growth potential lies and which they have thus chosen to target.

The supermarket chains have had some powerful allies in their rise to dominance. In the Eighties, laissez-faire planning allowed them to concrete over out-of-town sites with sprawling superstores; the recent belated attempt by the Department of the Environment to halt this exodus and the destruction of town centres it entailed still looks unconvincing. And the Government, for all its early pluralistic rhetoric, has been an ineffectual enforcer of competition policy. Instead, it has uncritically accepted the cliches of the global marketplace, arguing that on a world economic stage, Britain needs giant players and the bigger these are, the better. Industry wisdom - in other words, conventional wisdom - also suggests a future dominated by global leviathans.

The truth, however, is that the rise of the superstores is resistible. Political and social choices just make it seem as though there is no alternative. And those choices carry costs.

The first concerns that overworked word "community". One does not need to romanticise the high street or the town centre to conclude that it embodied something about civic identity, neighbourliness and a sense of wider allegiances - what used to be called "public spiritedness" - which are wholly excluded from the sanitised interiors of the superstore. Supermarkets have helped to destroy this and have replaced it with something patently inferior, to do solely with consumption. The social costs of this, such as costs of crime, are impossible to measure accurately but are probably enormous. Moreover, in an age when we must consider the environmental impact of our lifestyles, we can no longer afford such a one-dimensional approach to consumption.

The second issue is power. Nationally, no superstore technically constitutes a monopoly: Sainsbury's and Tesco just about muster a 25 per cent national market share between them. Yet, despite their much-vaunted competitiveness, they behave almost like clones, with one chain's cut-prices or customer loyalty scheme quickly emulated by another. In reality, they are an oligopoly - an unelected corporate elite which increasingly acts as the arbiter of a nation's tastes and rewards itself handsomely for so doing.

The elite is composed of businessmen and devoted to the bottom line. It leads from behind, eschews experimentation and operates middle-range, safety-first policies. Hence, for example, the supermarkets' habit of choosing the more popular, fatty and sugary foods for their promotions rather than healthy alternatives. Hence, too, the relative absence of organic products on supermarket shelves and the complaints of food producers that to satisfy supermarket requirements, they must produce a standardised, uniform product, usually doused in chemicals.

The extent of the commercial power wielded by the big chains means such complaints are rarely voiced in public. In effect, a new paternalism has arisen - brought about, paradoxically, by the exercise of consumer choice. Not only should this prompt questions about the concept of consumer sovereignty in a complex economy. It also raises a disturbing prospect - that when the dominance of the big supermarket chains is nearing the 100 per cent mark, we may stand among the aisles of products, marvel at the breadth and novelty, and never realise what we are missing.

Comments