For the past fortnight, a succession of key trade figures has been making its way to the Houses of Parliament to give evidence to the All Party Small Shops Group hearings on ‘High Street Britain in 2015’. It is a rare opportunity for campaigners acting on behalf of the independent retail trade to speak directly to MPs about the threat to retail diversity caused by supermarket growth, regulatory burden and the policies of local and national government. Chaired by Lewisham Labour MP Jim Dowd, the hearings are designed to aid the production of a report to be placed before policymakers on the future of local retailing.
The hearings opened with the Association of Convenience Stores (ACS) - represented by chief executive David Rae and Mike Taylor of Musgrave Budgens Londis - and Federation of Wholesale Distributors (FWD), who expressed concerns about the immense buying power of large supermarkets and the damage caused to the fabric of the retail community by their aggressive trading tactics.
FWD director general John Murphy, supported by Steve Parfett, managing director of northern cash & carry firm Parfetts, gave the point of view of the wholesale industry. “The biggest issue we have seen in recent years has been the predatory incursion of the major multiple supermarkets into the local store and convenience sector,” Murphy said. The Office of Fair Trading’s notorious ‘two market’ ruling came under attack from both trade organisations, which also made reference to the supermarkets’ Code of Conduct, barriers to entry in the retail property market, shortfalls in the planning regime and the importance of the status quo in Sunday trading.
The second session was an uneasy one for British Retail Consortium director general Kevin Hawkins, who not only faced testing questions from the MPs present on below-cost selling, predatory pricing and supply chain bullying, but also whether he was purely present as a front man for the multiples. Hawkins was asked whether there was any evidence that the larger supermarkets were bullying suppliers to get better trading terms and if they had created a near-cartel situation in the process.
He replied that the Competition Commission had investigated these claims twice in seven years and had found a competitive market but no evidence that a cartel had developed. He added that the entry of Tesco and Sainsbury into the c-store market had brought improvements in the form of lower prices and better fresh food offers.
A BAD INFLUENCE
Robin Webster from Friends of the Earth expressed concern that the multiples had too strong a hold on the retail market. “Supermarkets represent a very wasteful system,” she told MPs. “They add to food miles, encourage congestion and increase car journeys, and have had a negative impact on farming and specialist stores.” Webster believes a solution would be to introduce stronger planning legislation, particularly as appeals are very expensive for authorities, and cited Liverpool’s rejection of a Tesco which has left the council with costs of up to £500,000.
She added: “The pendulum has swung too far in favour of the multiples. We hope that the code of practice by 2015 will become something that has teeth.” Colin Finch from the National Federation of Retail Newsagents (NFRN) was adamant that if no action was taken, very few, if any, specialist newsagents would exist in 2015. He added that the NFRN had lost 700 members in the first nine months of this year alone and that this had potentially grave consequences for the news trade.
He said: “There is a definite risk of a loss of small specialist magazine titles, as the multiples will stock only the top 200-250 titles and not order magazines in for customers.” Every organisation at the hearings welcomed the opportunity to put their case, but a lot of ‘ifs and buts’ about the process remain. The report is expected be published by the end of the year, and until then we can only guess at its conclusions, and whether they will change the stance of the government and the competition authorities towards the small shops sector.
But if MPs require any more evidence about the changes sweeping through food retailing, they need look no further than their own doorstep. The convenience store in Portcullis House across the road from the Houses of Parliament used to be a Cullens, but has recently been rebranded as Tesco.
CAST OF THOUSANDS
The Parliamentary All Party Small Shops Group was set up in October 2003 to provide a focus for MPs with an interest in independent and high street retailing.
Organisations that have given evidence to the group’s report on High Street Britain include: Association of Convenience Stores, Federation of Wholesale Distributors, Rural Shops Alliance, British Retail Consortium, National Federation of Retail Newsagents, National Federation of Subpostmasters, Retail Enterprise Network, Association of Town Centre Management, New Economics Foundation, Forum of Private Business, Friends of the Earth and the Independent Retailers’ Confederation.
Tesco, the Office of Fair Trading and Competition Minister Gerry Sutcliffe MP were scheduled to give evidence this week.