Power in the food system: The impact of supermarkets on smaller retailers and suppliers
As a consequence of this concentration of power in the hands of the big supermarkets food retailing has undergone a massive shift since the 1950's, from high streets, covered markets and district centres full of small independent specialist food shops (grocers, greengrocers, bakers and butchers) to the current domination of food retailing by the ‘big four’ supermarket chains; Tesco, Asda, Sainsbury's and Morrisons. In 1960, small independent retailers had a 60% share of the food retail market, supermarkets about 20%. Now the small independents share is reduced to 6%, while the multiples' share has increased to 88%.[11]
More than 13,000 specialist stores, including butchers, bakers, fishmongers and newsagents closed between 1997 and 2002, that's more than 50 each week, leaving many communities without access to shops and services. A report from Manchester Metropolitan University suggested that if theirdemise continued at that of rate, there would be no independent retailers left by 2050.[12] But the rate of closure has since increased even more dramatically,in 2004, 2,157 unaffiliated independent retailers closed compared with 1,079 in the previous year.[13] An inquiry by the All Party Parliamentary Small Shops Group earlier this year, into the dominance of retailing by grocery multiples, concluded that if no changes are made to the grocery retail sector, independent convenience stores, grocers, newsagents and petrol forecourts are unlikely to survive to 2015.[14]
Exacerbating this loss of small independent stores some of the big supermarket chains, notably Tesco, have moved into the convenience store sector. Tesco has been buying up chains like T&S; and Adminstore and converting them to its Tesco Express store format.
The takeover of the food retailing sector by the big supermarkets also has a knock-on effect for wholesalers who cannot compete with supermarket low prices. Londis, the national cornershop brand, has admitted that it is cheaper to buy branded foods from Tesco and resell them than to get them from its own wholesaler.
Suppliers are also caught in this imbalance of power. A handful of supermarkets are able to dictate terms, conditions and prices for farm produce. If suppliers complain, then the supermarkets simply buy elsewhere, but their dominance of the food retail sector means that the suppliers have noone else to sell their produce to. The imbalance of power has a knock-on effect throughout the supply chain, with the weakest links – small farmers, migrant workers, workers overseas, animals and the environment suffering the greatest exploitation. See Corporate Watch's briefing 'A Rough Guide to the Farming Crisis' (2004) for more information.
Number of Supermarkets and Superstores 2005
| Somerfield | 1,308 |
| Tesco | 2,365 |
| Sainsburys | 727 |
| Asda | 279 |
| Morrisons | 400 |
Definitions[15]
A supermarket is a self-service grocery store that sells food, beverages and other goods. It is usually located on urban high streets or in shopping malls, covering an area of between 4 – 12,000 sq ft.
A superstore is a retail outlet specialising in grocery sales, although not exclusively selling food, of between 25 – 50,000 sq ft. Often located on the edge of towns or out of town.
A hypermarket, is a superstore over 50,000 sq ft. These are always out of town or in large out of town complexes, with extensive car parking. They offer a larger range of non-food products, such as DIY and garden products and electrical goods. French and US hypermarkets can be as big as 90,000 sq ft
References[11] Institute of Grocery Distribution (2002) Grocery Retailing 2002: The Market Report [12] V.W. Mitchell and S. Kyris (1999) Trends in Small Retail Outlets, Manchester School of Management cited in New Economics Foundation (2002) 'Ghost Town Britain: The Threat from Economic Globalisation to Livelihoods, Liberty and Local Economic Freedom' [13] Institute of Grocery Distribution (2005) Convenience Retailing [14] All Party Parliamentary Shops Group (2006) High Street Britain 2015 www.nfsp.org.uk/uploads/pdfs/High%20Street%20Britain%202015%20report.pdf Viewed 22/5/06 [15] Keynote (2001) ‘Supermarkets and Superstores’
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