Happy New Year to you all. The start of the year is the time to reflect on the time past and think about the year ahead.
In 2010 the government set out radical cutbacks in public spending and tax reforms, not least the VAT increase. These big cuts and media stories about job losses and less money in the pocket will be increasingly real for people living in the communities that we serve as the year goes on. Our industry will adapt ranges, pricing and promotional strategies accordingly, but we all expect it to be tough.
Government has staked a lot on industries like ours being a major part of the recovery. I am optimistic that we will, but for this to happen ministers have some big decisions to take.
There is no doubt that parts of government are desperate to follow what they perceive is the quickest path to economic recovery and are attracted to the growth potential of the biggest supermarkets. This drive has to be resisted.
The long-term effect of supermarket success is fewer stores (through closing competitors), fewer people employed and reduced consumer choice. It is the growth of small and mid-sized businesses that will create more jobs and provide a broader base of competition and choice.
So top of the decision list is ensuring that supermarkets’ acquisitions are restricted through robust use of competition legislation; ensuring growth of the supermarkets is restricted to appropriate town centre developments where there is a clear case of economic need; and developing a suite of incentives such as business rates discounts to get businesses in high streets investing and growing.
So perhaps our new ministers’ resolution should be to resist the seductive idea that supermarket growth is the same thing as sustainable retail growth for the long term.