The last issue of the Walthamstow Underdog* read like the Evening Standard in its denunciation of high street supermarkets squeezing small shops out of business.
The Underdog warned of “supermarket special offers promoting goods cheaper than an independent retailer can buy from a wholesaler”. Well, God forbid that we should pay less for our food! Im sure the less well off hate the thought that their shopping may cost less. The argument seems to be that “all powerful” supermarket chains are driving out small shops and fleecing customers, is this the case?
Supermarkets are squeezing small shops out of the market and quite simply it is because most people would rather buy cheaper food from a supermarket than more expensive food from a small shop. These cheaper prices are made possible by the Economies of Scale which a company such as Sainsbury’s enjoys over a local shop. Economies of scale are savings a large company can make because of its size, for example a large firm may be able to buy labour saving machinery which a small shop couldn’t dream of, it could specialise within the labour force or streamline its purchasing operation.
Who does this “below cost selling” benefit? According to the Office of National Statistics Family Spending Report of 2005, average spending on food had fallen from 21% of family spending in 1982, to 16% in 2004/2005 as people enjoyed the benefits of supermarkets economies of scale. Another ONS report, from 2003, shows how this has been targeted, pointing out that “For households in the lower income range…food and non alcoholic drinks was the largest item of spending”.
So we see that, in actual fact, the greatest recipients of this fall in food prices brought about by high street supermarkets have been the less well off. In short, if we were to force supermarket chains from the area, the less well off would be forced to buy expensive food from small shops. In the middle of the 20th century, shopping had to be done every single day. Furthermore, the relative higher cost of groceries meant that meat, for example, was a twice weekly treat. Now, thanks the economies of scale from large supermarkets, even the relatively poor are able to eat steak whenever they want. Why would the Underdog deny them this?
Then there is the dazzling variety that supermarkets offer. Again, in the decades before supermarkets, mozzarella or feta cheese were available only to those rich enough to have them imported or to shop in specialist stores. Again, small shops lack the wherewithal to import this sort of food which has made eating in Britain far more diverse than it was. As Delia Smith said, “What, 14 years ago, had to be sought out in specialised food shops is now widely available in supermarkets up and down the country. Almost everybody now has access to good olive oil, fresh herbs, imported cheeses”.
What would the Underdog like to see then? A return to the days when the rich paid lots of money to import foreign food and the poor had to make do with a diet of stodge, with fruit available to them only at certain points of the year and the vitamin deficiencies that brings?
Sadly, the Underdog also failed to resist the standard dig at ‘big business’, making the ludicrous claim that “Money spent in a supermarket is spirited away to shareholders and management staff, rather than staying in the community where it is spent”. Again, the Underdog is at odds with the facts. Take Tesco’s Save As You Earn share scheme which saw 4,000 staff in Scotland share in an £8 million payout with some shop floor employees pocketing between four and five thousand pounds. In 2005, shop floor staff at Morrisons had a slice of staff share profits worth £19.7 million. Just today I read that the dreaded Tesco’s is to share £220 million in bonuses with 150,000 staff in “what is believed to be the UK’s biggest staff bonus”. Are these delivery drivers, check out staff and grocery handlers the corporate fats cats the Underdog wanted to criticise?
Supermarkets make exotic, healthy food available at low prices benefiting the less well off in society. They also have generous share schemes for the shop floor staff to share in their success. The public, the poor and the workers all benefit. What is the Underdog’s problem with that?
*The Walthamstow Underdog is the newsletter of the Walthamstow Anarchist Group (http://www.libcom.org/hosted/wag/)