Supermarkets: the very top of the food chain…
With shelves stacked high and prices low, the supermarket is at the very top of the food chain. Criticised for treating suppliers badly; draining our high streets of independent shops and ruining our communities, their one stop shopping is still very convenient in our time driven world.
So what part should they play in our future? And just how do we re-rejuvenate our high streets?
Supermarkets are everywhere. But how big are they?
“Supermarkets are so ubiquitous that they account for 85p in every pound that the British spend on food.”
The Rough Guide to Food
In our convenience-obsessed world it’s hard to believe the supermarket is just over 70 years old. The very first, called King Kullen, opened in 1930, in a used garage in Queens, New York City. It was named after the movie King Kong, and operated under the slogan: “Pile it high. Sell it low.”
While we have all enjoyed one stop-shopping and cheap food, the power of supermarkets has exploded.
Over the past 30 years, mergers, acquisitions, globalisation and free trade agreements has meant fewer players with more power to lobby governments, and shape food policies.
In 1960, UK small independent retailers owned 60% of the food market.
Now just 50 years on, they are reduced to 6%, while the big brand supermarkets have around 80%.
Tesco, the largest supermarket chain in the UK, owns around one third of this total market.
In 2009, Tesco announced it had made more than £3 billion profits and opened 157 stores around the UK.
Such is their purchasing power, that smaller supply chains, like Londis, the national corner shop brand, has admitted it’s cheaper to buy their products from Tesco rather than buy from their own wholesaler.
If a chain store of shops like Londis is suffering at the hand of the big guns, what hope is there for the small, independently owned shops?
Find out more
Andrew Simms book, Tescopoly: How one shop came out on top, and why it matters?
Tescopoly campaign website
Check out Matrix Share Matrix, website which maps the global food system – who owns what and where…
And if you’re really interested in the history of the supermarket, check out Groceteria.
What happens to small business?
It’s well documented that the arrival of a supermarket dramatically erodes the numbers of butchers, bakers and fruit and veg shops on our high streets.
This has become so common in the UK, the French even have a term for it. It’s known as “la Londonisation.”
Around 2,000 independent shops disappear every year.
This means fewer jobs, fewer businesses and for those without a car means it is very difficult to find fresh food on foot.
One study from Manchester University, suggests that at the present rate of demise there will be no independent shops left by 2050. Another parliamentary report predicts that many will have gone by as early as 2015.
Studies have also shown that supermarkets erode the local economy.
The New Economics Foundation have found that for every £1 spent in a local shop, twice as much remains in the local economy, as it does when that £1 is spent in a supermarket and escapes up corporate supply chains.
Because of this, some communities, particularly those involved in the Transition Town movement, have created their own currencies.
Find out more
The report from the All Party Parliamentary Small Shops group
The report from the New Economics Foundation.
Debate Your Plate film above on the Brixton Pound, the first urban alternative currency in the UK.
Do they really offer more choice?
At first glance the endless rows of shiny fruit and veg seem to offer us incredible choice.
But take the English apple for example. The UK grew almost 2,500 different types of apples but these days you would be lucky to find more than a handful on your local supermarket shelves.
Why is this? Supermarkets choose fruit and veges by their ability to withstand logistics.
They need to be robust enough to travel long distances, withstand refrigeration and still look perfect.
It’s all about appearances. Are the carrots long and straight? Do the bananas have the perfect curve?
Find out more
George Monbiot about the reality of fruit and vegetable varieties in the supermarkets.
Corporate Watch: What do the supermarkets really mean by local?
Do supermarkets bully their suppliers?
“There are two hundred thousand farmers, dealing with, basically speaking, three supermarkets, two grain merchants, four fertilizer companies. Not a chance…they’ve got power, real power.”
Charles Peers, Oxfordshire farmer. Source Corporate Watch
It is difficult to get to the bottom of exactly how the relationship between supermarket and supplier works – largely because producers are often too afraid to speak out, for fear of losing their contract.
Supermarkets dictate the terms and conditions of their relationships with the millions of growers and workers across the world who supply them.
A recent report from the Competition Commission, released in April 2008, reveals the following:
- Prices paid to producers have been squeezed to the point that they can barely make ends meet. In the UK alone more than 100,000 farmers have left the land over the last ten years, unable to make a living.
- Producers pay supermarkets to have their products on their shelves. This is known as “slotting or listing fees.” In the US, this has been known to cost as much as $250,000 in high demand markets but seems to be a global, widespread practice.
- Producers are often made to pay for supermarket advertisements, and the marketing of their products.
- According to a survey released in 2007 by accountants Grant Thornton, more than two-thirds of suppliers said they had no written contracts with supermarkets, and 23% claimed supermarkets were unwilling to sign any written terms whatsoever.
- Almost half had no pre-agreed order-cancellation notice period.
- Orders are often left until the last minute.
- Producers must absorb the costs when consumer-demand changes.
- Special offers like “buy one, get one free”, or price cuts are often paid for by the producers – with little or no negotiation.
And it’s not just food producers who are feeling the effects of supermarket’s buying power.
Research shows one in five books and a quarter of all CD’s are now bought in the supermarket.
Find out more
A rare interview in The Times, with an ex-supermarket grower who has spoken out at the heavy- handed approach of the supermarkets.
The full parliamentary report from the Commerce Commission.
What’s wrong with supermarkets, according to campaign group Tescopoly.
And an interesting report from Corporate Watch.
Food journalist Felcity Lawrence’s book, Eat Your Heart out, why the food business is bad for you and bad for the planet
How do they treat their workers?
“They called us all to a meeting and they said that we would all be laid off the next day.
Then they rehired us for almost half the wages. We used to have almost a month holiday but this went down to 14 days.”
Costa Rican banana worker on a plantation supplying Tesco. source Action Aid research – from Tescopoly
On-going price wars mean workers, particularly in developing countries who are at the bottom of the supply chain, suffer poor conditions and even lower wages.
Research from ActionAid showed that banana workers in Costa Rica were earning a mere 33p per hour. On such a low wage they felt under pressure to work through their break, risking exposure to potentially harmful chemicals, as break time was when the bananas were sprayed with pesticides.
Research by War on Want, a charity that fights international poverty, investigated conditions for the workers producing cheap supermarket clothes and found low wages, long hours and shocking conditions.
Find out more
Check out this research from Action Aid and Bananalink.
Research from War on Want.
If there is all this evidence against supermarket, do they silence their critics?
Tesco, in particular, is gaining a reputation for taking critics to court.
Check out this story from the New York Review of Books, written by the editor of the Guardian about their recent brush with Tesco lawyers and The Times. They report that Tesco Lotus, as it is known in Thailand, has taken a number of outspoken individuals to court.
Is there any good news?
Yes! Lobbying from campaigners and the government’s own research into the behaviour of supermarkets has resulted in the development of a new watchdog and an ombudsman which can hold supermarkets to account.
Find out more
About the ombudsman in The Guardian
About the new legislation on businessandleadership.
The National Farmer’s Union accuse supermarkets of “bullyboy” tactics before new legislation becomes law in The Guardian.
Grassroots Action on Food and Farming: An alliance including Friends of the Earth and the Soil Association who are calling for stricter controls over supermarkets.
Breaking the Armlock. An alliance of 17 consumer and environmental associations, who are all calling for tighter controls on supermarkets.
There’s a proposal for a new supermarket in my town – can I stop it?
There have been many cases of communities who take on the supermarkets – and win.
But you will need help negotiating the UK’s sticky planning laws, so here’s some guidelines to get you started.
Find out more
The farmer who took on Tesco’s and won, in The Times.
George Monbiot on planning laws
Photo credit: Thanks to Vauvau on Flikr.
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