W h a t ’ s wr o n g wi t h Su p e r m a r k e t s w w w . c o r p o r a t e w a t c h . o r g . u k Strip lights, endless queues of strangers and shelves of packets, fake smiles from bored checkout assistants - isn't there a better way to get our food? Supermarkets wield immense But the tide may be turning. power over the way we grow, Unease at the true cost of buy and eat our food. They supermarket food is are shaping our environment, spreading among consumers, our health and the way we who are beginning to join interact socially. These forces with the farmers and changes have gone workers who have always unchallenged because known that supermarket consumers have been sucked 'choice' is a bad deal. into superstore lifestyles, persuaded that the This booklet aims to opportunity to help campaigners get select from to grips with the six different reality of brands of supermarket cut-price domination and oven chips argues why we at three in must start the morning looking for represents alternatives. choice and value. Researched and written by Lucy Michaels and the Agriculture Project at Corporate Watch What’s Wrong With SUPERMARKETS W h a t ’ s wr o n g wi t h Su p e r m a r k e t s w w w . c o r p o r a t e w a t c h . o r g . u k What's Wrong with Supermarkets? Overview: Supermarkets sweep up 2 Contents The supermarkets we know today The falling cost of global 3 Overview: Supermarkets sweep up started in Britain with the Co- transportation has helped operative Movement in the 19th supermarkets source abroad more 10 The Cheap Food 'Mantra' - Stack it high! Sell it low! century. This was a group of cheaply. Getting bigger ensured 11 Encouraging industrial agriculture independent local retailers economies of scale, and going self- - and destroying small farms worldwide controlled by its consumer members, service cut wage bills. The 'weekly 17 A spoonful of organo-phosphates - who sold un-adulterated foods at shop', made necessary due to prices working people could afford. changing work patterns and possible Dangerous chemical usage in food & farming It was in post-war Britain that the through a massive increase in car 17 Bye-bye High Street - The destruction of communities and jobs foundations were laid for the ownership, has also increased 20 Apples from Africa and pears from Peru - supermarket revolution; the 1948 supermarkets’ popularity. Food miles and climate change Agriculture Act initiating the ‘cheap food’ policy that is with us today. During the last three decades, the 23 Oiling the trolley wheels - Undue influence on government With government subsidies to United Kingdom has been 24 The plastic smile - Shop and farm workers rights farmers, new machinery and new transformed from what Napoleon 27 'Rip-Off Britain' - The Competition Commission enquiry chemicals arriving on farms, food described as a 'nation of shop- keepers', with innumerable small 31 'Mummy, mummy, can we buy the Barbie spaghetti shapes?' - production rocketed. businesses, to a supermarket culture promoting unhealthy processed food. The golden age of supermarkets dominated by a handful of large 33 Choice? Convenience? Value? began in 1964, with the abolition of retailers. Their formula for success is 34 And for dessert... What can you do about it? Retail Price Maintenance simple - they operate efficiently, they - the mechanism that provide a one-stop shop and they 38 References had allowed enjoy consumer confidence. Today manufacturers and they wield immense influence over Researched and written by Lucy Printed by Oxford Greenprint on 100% post-consumer suppliers to dictate the way we grow, buy and eat our Michaels and the agriculture recycled paper, using solvent-free inks and renewable their prices. With food. They are shaping our project at Corporate Watch. This energy. (Browse: www.oxfordgreenprint.co.uk) First market liberalisation, landscape, our health and the way project works with Grassroots published in Feb 2002. Reprinted April 2002, Action on Food and Farming March 2003 and April 2004. the supermarkets we interact socially, and these (GAFF) campaigning against the began to dictate changes are going unchallenged corporate control of agriculture. prices back to the because of our fast food lifestyles; Design and back cover by Stig. Corporate Watch suppliers, meanwhile consumers want quick access Front cover & many cartoons by V. 16b Cherwell Street, Oxford, OX4 1BG, UK offering bargains and to a wide choice of goods at Thanks to Michael Hart, Kathryn 'loss leaders' to entice low prices. But, as this Tulip, Judith Whateley, Rebecca Tel: +44 (0)1865 791391 customers. briefing will illustrate, Spencer, Pippa Gallop, Kes and the Email: [email protected] Food and Farming course at such 'choice' has come at a Schumacher College, Devon, price... November 2001. www.corporatewatch.org.uk 2 3 What’s Wrong With What’s Wrong With SUPERMARKETS SUPERMARKETS W h a t ’ s wr o n g wi t h Su p e r m a r k e t s w w w . c o r p o r a t e w a t c h . o r g . u k The UK grocery market is controlled Consolidation in the A supermarket In this report, we focus on supermarket by the supermarket multiples, multiples or chains: the corporations that virtually all of which are household ...is a self-service grocery outlet own ten supermarkets or more around food retailing industry that sells food, beverages and the country, as defined in the recent names. The top five are Tesco, In 2002, food sales through other goods. They are located Competition Commission report. We use Sainsbury's, Morrisons (after its supermarkets reached £83.68bn - a on urban high streets or in 'supermarkets' to refer to all three acquisition of Safeway), Asda and growth of 5.1% on the previous year, categories of large grocery store. shopping centres, covering an Somerfield. In addition there are and a growth of 30% since 1995. 2 The Conservative Government tightened area of 4,000 - 25,000 square ‘upmarket’ supermarkets such as Industry analysts Keynote estimate up planning restrictions on out-of-town Waitrose (owned by the John Lewis ft. Over the last 10-15 years, supermarkets in 1993 and 1996 as it that the value of retail sales of food some have developed in out-of- became clear that they were damaging the Partnership) and Marks & Spencer, through supermarkets will grow by town or edge-of-town locations. countryside, town centres and local and smaller or regional operations 16% by 2007. The Institute of Grocery economies, as well as increasing traffic. such as Iceland and Booths. At the Retailing (IGD), on the other hand, This was supported by New Labour who A superstore cheap end are the German bulk predicts a considerable slow down in promised to rejuvenate city centres and discounters, Aldi and Lidl and the 3 ...is a retail outlet specialising tightened up planning restrictions growth over the next few years. in grocery sales, although not including a moratorium on the sale of Danish chain, Netto that stock exclusively, of 25 - 50,000 school playing fields for out-of-town smaller ranges of mainly imported According to the IGD in 2001, the square ft. They are supermarket developments. goods. The Co-op is unique as it major supermarket multiples make usually located As a result, supermarkets ismade up of 38 regional food up 60% of the market, convenience have recolonised the high retailing consumer co-operatives or retailers make up 20%, the smaller out-of-town or on Number of Supermarkets street with a whole new ‘societies’ around the UK. Anyone multiples, independents and the edge of towns. and Superstores 2004 1 breed of convenience can become a member of the Co-op specialists make up 13%, co- They offer a larger stores, many open 24 Somerfield 1277 range of non-food hours, such as Tesco and become involved in the running operatives make up 5% and bulk Tesco 775 4 items, such as DIY Metro and Sainsbury's of the regional society. discounters 2%. Market analysts Safeway 480 Local, as well as petrol and garden Taylor Nelson Sofres, who calculate J. Sainsbury 517 forecourt stores. Stores Convenience stores are not classified market share by measuring shopping products and such as Tesco Express Marks & Spencer 297 as 'supermarkets' as they are smaller habits in 15,000 households, would electrical goods. and Sainbury Central are in floor space and are aimed at ‘top Asda 258 aimed at passers-by and put the figure for the top five much up’ rather than ‘one trip’ shoppers’. A hypermarket Morrisons 119 harried commuters higher at around 75%. looking predominantly These range from independently - ...is a superstore for packaged ready owned cornershops to ‘symbol’ The trend towards consolidation over 50,000 square meals. groups such as Spar and Londis: looks set to continue. In late 2000, ft. These are always out-of- Many have extended existing superstores groups of independent stores analysts suggested that there was not town or on large out-of-town into the storage space no longer needed sharing purchasing, distribution and really room in the sector for all the due to Just in Time delivery methods, or complexes, with extensive car marketing. The 'convenience' sector large retailers. Verdict Research parks. French and US flouted a legal loophole to add mezzanine levels for which planning permission is is rapidly blurring with the predicted that 'Within the next five hypermarkets can be as much not needed.