"Tesco link with Esso to create 4,000 jobs”, “Kingfisher makes 4,800 more jobs as profits soar”, “Struggling Safeway to create 3,500 jobs,” run the headlines.
    
Supermarkets are never slow to publicise their ability to create jobs. As environmental and local community groups fight new superstore developments, the chains continue to stress the employment benefits of store expansion. It's certainly a compelling argument. Imagine a local planning department mulling over a new store application. On the one hand, they want to support appeals to save green spaces and town centres but on the other they are lured by the promise of new jobs in the community - and who could argue with the benefits that new jobs would bring?
     
But do new supermarkets really create jobs? A report from the Institute of Labour Research at the University of Essex showed that new superstores boosted employment in the food retailing sector by 12% between 1983 and 1994. But what about the jobs that were destroyed? A more recent report by the National Retail Planning Forum [1] revealed that new food superstores have a net negative impact on retail employment. It showed that each new superstore accounts for a loss of 276 full-time employees. The net impact of 93 superstore openings would lead to a decline of 3% in the number of full time jobs - or a loss of 25,000 jobs within three years. The immediate increase in superstore employment is offset by the more gradual decrease in specialist food retailer employment in the 15km zone around the stores.
     
So, whilst supermarket chains claim they create jobs and revitalise local economies, opposing evidence exists. This confusing picture has not been reflected in media headlines. Take The Times last January: "Supermarkets are to create about 28,000 jobs in the UK this year…Tesco is to take on 22,000 more staff… J. Sainsbury is set to create about 8,500 jobs…Asda is creating 6,000 part-time jobs…Safeway plans six new stores…involving up to 1,200 jobs." This argument is easy to comprehend and easier to swallow. By contrast, complex economic and social analysis about the long-term impact on jobs has barely featured in the media. It is harder to grasp and much less palatable.
     
The same issues arise in the United States, where the king of retailing is Wal-Mart - the multinational that has recently swept into the British market by buying Asda. The Financial Times this February reported a slow-down in Wal-Mart’s growth, partly due to its international expansion and the likelihood that many of the things which made Wal-Mart so successful in the US are difficult to transfer into markets where labour practices and shopping habits are different [2]. However, this latest analysis gives little real cause for concern to the company, coming from a set of results which marked Wal-Mart’s 29th consecutive year of record sales and earnings. Ironically it is partly due to Wal-Mart’s own increasing size and past success that the comparatives seem much tougher.
     
Some analysts say 76% of counties with a Wal-Mart boast an increase in employment in the retail trade. But according to critics in the numbers game, when Wal-Mart comes to town, jobs, or at least the job growth rate, fall away. In one study, one Wal-Mart part-time position was shown to displace 1.5 full time jobs. Another study shows that 140 new jobs displace 230 higher-paying ones. Elsewhere, research points to the prevalence of part-timers, making hiring and firing easier, and displacing the benefits available only to full-timers. Moreover, some have reported that when Wal-Mart entered the Canadian market through acquisition of an existing chain, as it has just done in the UK, it quickly saw off thousands of jobs in rival stores.

We should not be surprised that superstores will push their case, littering their planning applications with the promise of more jobs. By the same token, we clearly should be sceptical about their claims. Claims that supermarkets 'are to create X thousand jobs' are at best a wild exaggeration - at worst they are downright lies.

This information is drawn from a report to be published by Sustain’s food poverty project in the summer (contact Sustain 0171 837 1228). The report will show that government policy on expansion and location of supermarkets is critical to the success of their policies on social exclusion and regeneration of market towns and inner city areas. The work will also examine the likely impacts of the introduction of Wal-Mart to the UK.

[1] ‘The impact of out of town food superstores on local retail employment’, National Retail Planning Forum, 1998
[2] FT 16/2/99