Outline The Nature of Supermarkets Power On The High Street and Beyond. This essay is looking at the power of supermarkets and how they use this power. The word power is often used to “denote influence, control or domination” (Allen, 2009, p. 9) Supermarkets use this power over suppliers, workers, Councils, consumers and other shops and there are conflicting views as to whether this power is used for the good of everyone or at the expense of everyone other than the supermarkets themselves or as Dennis Wrong (1977) calls it Positive Sum Game- “where all parties involved benefit to some extent” or Zero Sum Game- “where supermarkets wield their power at the expense of others” (Allen, 2009, p. 70) Supermarkets due to their sheer size and buying power have a huge advantage over the small independent high street shops.
They offer a massive choice of products at a low price because they are able to buy in large quantities at discounted prices, sometimes even below cost price. These out of town supermarkets have convenient parking and consumers are able to do all their shopping in one place, from food, clothing, electrical equipment, financial services, gas and electricity etc… This all makes shopping in these retail parks easier and cheaper for the consumer and the smaller independent high street shops are unable to match these prices, choices and convenience and are therefore unable to compete against the giants.
As we’ve seen a move towards more out-of-town, car-dependent stores with large-format retail dominating, its driven trade away from town centres which has clearly had an impact on the small shops that are there, and we see approximately fifty small shops, independent shops, closing every week” Helen Rimmer (Friends of the earth) (‘Evidence in the social sciences’, 2009 track 1) The big supermarkets have also introduced small high street Metro and Express stores to put further pressure on the independents and gain those consumers without cars and who are unable to get to the out of town retail park.
According to Helen Rimmer (Friends of the Earth) “There’s been a study of the impact of Tesco Express which is the Tesco convenience store when they’ve moved into an area, that generally led to a decline, in the small shops locally, of about 30 to 40 per cent” (‘Evidence in the social sciences’, 2009 track 1) To keep their prices low, Supermarkets are putting huge pressures on suppliers both in the UK and globally, they are often dictating how much they will pay and even the size, shape and colour of fruit and vegetables.
To meet these demands suppliers are being forced to cut their cost to the bare minimum and in many cases are operating at a loss, forcing the smaller suppliers out of business. There is massive wastage, as food is rejected if it doesn’t conform to the set cosmetic appearance that the supermarkets have imposed, often sacrificing taste and flavour for appearance. Farmers have been known to plough crops back into the land when they have been rejected or the supermarket wants to pay a ridiculously low price.
The cost of this wastage is usually met by the supplier, as are the ‘buy one get one free’ (BOGOF) deals that the supermarkets offer to entice their customers. This cost cutting is passed onto their workers both in the UK and abroad. In the UK they are more often than not migrant agency workers who pick and sort the salad crops, who are paid very low wages, sometimes below the cost of living.
“There is a high price to be paid for cheap goods and that cost is borne one-sidedly by the weakest and least powerful groups in the supply chain” (Allen, 2009, p. 3) Meanwhile abroad, cheap clothing is produced in sweatshops, with exploited workers enduring poor conditions, long hours and being paid an inadequate wage. “The true cost of the cheap jeans and trousers, as well as the bargain-priced shoes, which line Asda’s and Tesco’s aisles, War on Want claim, is the absence of a living wage for workers in their supply chain” (Allen, 2009, p. 85) However the fact that this work is being sourced in Asia means that the clothing industry in these countries is expanding rapidly and this means work that was not there previously.
These jobs are in demand by the locals as it means a way out of poverty for them, “the last thing a country like this wants is for the big retailers to stop sourcing their labour from them. That, it is pointed out, would threaten the steadily rising living standards of the garment workers”. (Allen, 2009, p. 91) Supermarkets use their power over local government to persuade them to allow the further development of new stores. This is done by a method called ‘Planning Gain’ in which they pay for civic facilities to be built i. e. : leisure centres and Doctors surgeries, in return for planning permission for a new store.
These developments are Sometimes in run down, poor areas and the development of a new store can be interpreted as a good thing in helping the regeneration of the area, creating new jobs for the unemployed and encouraging new business into the area. Again there is controversy surrounding this, many believe it is for the good of the community and other believing it is “merely the latest in a series of opportunistic moves by them to get stores built at a time when planners and government frown upon out-of–town developments” (Allen, 2009, p. 4) The supermarkets are providing consumers with what they want.
Cheap products in the current climate of recession are a necessity for many having to tighten their belts. The ease of having everything in one place makes it convenient to shop for those who have cars and can get to the out of town stores. “People like what supermarkets do and the efficiencies that come from the scale of their operations, the quality and choice that they’re able to offer, the prices that people find appealing are all reasons why people choose to shop in supermarkets. Richard Dodd (British retail consortium. )(‘Evidence in the social sciences’ 2009, track 1)
There is no doubt that supermarkets are powerful and it is very often a zero-sum game for their suppliers, the supplier’s workforce, and the independent shops on the high street, when they wield this power against them. Town centres and the smaller independent shops are in decline, “12 per cent of town centre retail premises are now vacant compared with 4 per cent last autumn so that’s a threefold increase”.
Richard Dodd (British Retail Consortium) (‘Evidence in the social sciences’ 2009, track 1) and many farmers are going out of business. The consumers however are getting what they want, but at what cost! In this consumer Society that we live in they are seduced by the choice and bargains and turn a blind eye to the lengths the supermarkets are prepared to go to give them this. The exploitation of the workers in the sweatshops of Asia, the bullying of the farmers to sell their milk, fruit and vegetables to them at the price they dictate and the small shops being put out of business.
Yes supermarkets are powerful but at the end of the day it is the consumer who is enabling them to continue being so. “If customers like what a retailer is offering, they will choose that particular store or type of store and they’ll use it. If the retailer gets it wrong, the customers won’t show up and that retailer will very quickly go out of business. It is customers who have the power in all of this”. Richard Dodd (British retail consortium) (‘Evidence in the social sciences’ 2009, track 1)