Bill Midgley column

Oct 18 2006 By Bill Midgley, The Journal

The half-yearly results announced recently by Tesco seem to have created something of a furore.

Not on this occasion merely because of their size (something of the order of £1.1bn), but also because of the apparent impact that Tesco is having on our communities. Profits of this nature, which reflect a margin on sales of around 5% are by no means uncommon, based upon margin figures alone, but what is exceptional about Tesco is their sheer size and growth rate over the past quarter of a century.

More disturbing, however, is the commentary regarding the impact of organisations such as Tesco on our social structure. They are being criticised now for destroying communities, removing shoppers from city centres, and generally being classed as unfair competition. But perhaps the answer lies with the customers who obviously appreciate what this company has done.

Far from destroying communities, they are probably creating them in that they are bringing people into huge one-stop shop establishments which also in many areas create secondary shopping around them. They provide car parking, something which our city centres seem incapable of doing, and often seem more intent on driving cars out of the city. They often put on bus services, and they open at hours which are convenient to the customer and not to the store owner or their staff. The pattern of our lives in the late 20th Century and 21st Century has changed, and the success of Tesco is due to the fact that they have reflected what the customer wants and are prepared to provide those goods at an attractive price.

The small traders who often are the loudest in their condemnation are those who have consistently opposed the establishment of supermarket groups in town centres, and have then complained even louder when sites have been found on the periphery of urban areas drawing large numbers of shoppers away. It may be dangerous to talk about the social impact of supermarkets, but like it or not they seem to be very attractive to a broad cross-section of the public.

Bill Midgley Past president, British Chambers of Commerce