Archived press release

Tescos Growth: Every Little Hurts

17 January 2005

Tesco is expected to announce strong performance figures tomorrow, however Friends of the Earth is warning that its unchecked growth is leaving the public with no where else to shop and is putting small shops and British farmers out of business.

The environmental group is calling on the Government to stop putting big companies first. They need to listen to local communities and small businesses by using two upcoming crucial opportunities to change policy on supermarkets. The Department of Trade and Industry currently has the chance to amend the supermarket Code of Practiceso that it protects suppliers from the bullying behaviour of big supermarkets, while John Prescott's office is due to issue new planning policy guidance on town centres, which could give a boost to local shops and local economies.

Friends of the Earth's Supermarkets Campaigner Sandra Bell said:

"Many retailers are reeling from their worst Christmas trading for years,yet Tesco is expected to announce healthy trading figures. The retail giant's uncontrolled growth is destroying our town centers by putting local shops out of business leaving the public with no choice but to go to Tesco, while the its thirst for profits is leading to many British farmers going out of business."

The Government must set out more robust planning policy, introduce stronger protection for suppliers and call a moratorium on any further takeovers. There will be fewer local shops, more farmers will go out of business and there will be little hope for a more sustainable future for UK food and farming".

According to the latest data by TNS Superpanel, the Christmas period helped Tesco to achieve a record share of the grocery market at 29% [1]. Yet recent consumer polls show that people still value local shops and have greater trust in the food sold by small specialist shops than by giant supermarkets.

Friends of the Earth is part of an alliance of 15 organisations calling for a strict Statutory Code of Practice to protect supermarket suppliers and an independent Retail Regulator to enforce it.

The negative impacts of Tesco's dominant position include:

• Local traders are being pushed out of business by new Tesco stores reducing consumer choice and damaging local economies [2]

• Tesco fills its shelves with imported produce instead of supporting UK farmers; surveys by Friends of the Earth have shown that at the height of the UK apple season well over half the apples on offer in Tesco stores are imported [3]

• Farmers in the UK and overseas are being bullied by Tesco buyers as the company passes costs and risks back down the supply chain [4]

• As alternative shops are lost, access to healthy food could be affected. Tesco performed poorly in a recent rating of major retailers contribution to healthy diets carried out by the National Consumer Council [5]

• Workers overseas growing and packing food for Tesco and UK homeworkers assembling goods for Tesco are not getting basic employment rights [6] [7]

• Tesco, like other big supermarkets, causes environmental damage by transporting food long distances, overpackaging its food, and building stores which are highly inefficient in terms of energy use.

Notes

Government action needed

Friends of the Earth is part of an alliance of 15 organisations calling for a strict Statutory Code of Practice to protect supermarket suppliers and an independent Retail Regulator to enforce it. The new Code would replace the existing weak and voluntary code introduced in 2002. The Office of Fair Trading is due to report on its audit of supermarkets compliance with the code next month and a response from DTI is expected soon after. The `Breaking the Armlock' alliance says that it is already clear the existing code is not working and it must be changed without further delay.

New national planning policy guidance about town centres (Planning Policy Statement 6) is also due out early this year. The draft version of the statement alarmed Friends of the Earth and smaller retailers by its inclusion of a policy encouraging the provision of large format stores on the edge of town centres - despite strong evidence that such stores take away trade from existing town centre shops. Friends of the Earth is calling on the Office of the Deputy Prime Minister to remove this clear bias in favour of big supermarkets from the statement and to encourage more diverse retail provision instead.

The environment group also wants a moratorium on any further takeover of other chains by Tesco. Over the last two years Tesco has been allowed to take over the T&S and Adminstore convenience store chains with no investigation by the competition authorities. It is growing its market power in this way and further reducing consumer choice. Along with the Association of Convenience Stores, the National Federation of Women's Institutes and FARM, Friends of the Earth has called for a new investigation into new trends in the grocery market including the impacts of the big four taking over convenience store chains [8].

[1] Grocer Today News, Supermarkets win the Christmas battle, 13/01/05

[2] Examples of the negative impacts of new Tesco stores are available from Friends of the Earth or see www.foe.co.uk/resource/briefings/pps6_damage_town_centres.pdf (PDF)

[3] www.foe.co.uk/resource/briefings/apples_short_supply.pdf (PDF)

[4] www.foe.co.uk/resource/briefings/every_little_hurts.pdf (PDF)

[5] Rating Retailers for Health; how supermarkets can affect your chances of a healthy diet, National Consumer Council, December 2004

[6] Trading away our rights; women working in global supply chains, Oxfam 2004

[7] Homeworking in Britain: Flexible working or exploited labour?, National Group on Homeworking, 2004

[8] www.foe.co.uk/resource/press_releases/call_for_new_investigation_25112004.html

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Published by Friends of the Earth Trust