Talking Tesco: UK Competition Commission

Why are we publishing these comments?

Tesco has been reading with interest the third party comments on the Groceries Market Investigation that the Competition Commission has been publishing on its website. Our formal submissions have addressed many of the issues raised by these comments, particularly those of some of the professional lobbying organisations. However, a number of submissions on the Competition Commission’s website contain more specific comments about Tesco which we have not covered in our formal submissions.

Some of these specific comments are inaccurate and misleading, and we are providing a series of short notes in order to put the record straight. In the interests of transparency we are today publishing the first such series of notes.

Gerrards Cross

Several submissions have been made to the Commission regarding Gerrards Cross and it has attracted much attention elsewhere due to the problems we had constructing the store.

Our proposed store in Gerrards Cross was an innovation in superstore design. Although in need of a food store, there was a shortage of suitable land within the town. Rather than try and build an out-of-town store we developed plans for a store that would involve bridging over the existing railway tracks, forming a raft to create a site of sufficient size for a superstore with adequate car parking. Unfortunately in June 2005 the tunnel partially collapsed. The causes of the collapse have been the subject of exhaustive enquiry, which is ongoing. We know that the tunnel collapse caused significant inconvenience and frustration to those who live, work or travel in the area and we are truly sorry for this.

One of the main reasons we looked to build a store in Gerrards Cross is because of the number of local residents who are shopping in our other stores many miles away there is a local need for a supermarket in Gerrards Cross. It will attract shoppers who are currently shopping in towns several miles away, reducing road miles and bringing shoppers into the town. We have undertaken extensive consultation and although there is some vocal opposition to the store many residents are in favour of the development. Hundreds of residents supported our application and many of these spoke in favour of our position at a public inquiry. Many residents are still unhappy with the current level of grocery shopping in the area. In recent months one such group of pensioners have come out in strong support of the store – carrying placards and campaigning outside the site.

One elderly resident has explained that Tesco would provide her with an affordable and better range of food, compared to the town's current supermarket, Fishers, and the new Marks & Spencer Simply Food store. She said:

"Yes we have Fishers, but it's not a very big store and they haven't got the variety of food. Plus they're very expensive. I treat myself to odd bits and pieces but I certainly couldn't afford to do all my shopping in M&S."

She added that many elderly residents would also like to have a Tesco because they have to rely on buses to take them to towns such as Amersham to do their weekly shop.

"I'm limited to what I get. We have to go back and forth, rather than go do a big shop in one go."*

We obtained permission at Gerrards Cross following an appeal. We worked with the planners and identified an edge of town centre site just to the south of a railway station. The site was given planning permission having been thoroughly examined by the Planning Inspectorate as well as the Deputy Prime Minister. All the plans we are implementing have all relevant legal consents in place, issued when all the concerns of local people had been fully aired and considered by the authorities.

Unfortunately in June 2005 the tunnel partially collapsed. The causes of the collapse have been the subject of exhaustive enquiry, which is ongoing. We know that the tunnel collapse caused significant inconvenience and frustration to those who live, work or travel in the area and we are truly sorry for this.

We have now received a full review of the project from new contractors, Costain, and new structural engineers, Scott Wilson. This is a thorough and detailed piece of work. We are carefully considering its contents and are carefully reviewing their recommendations with Network Rail. We have not yet made a decision whether to proceed with construction of the store. We hope to be in a position to make a decision on the future of the project very soon. We are working on this as quickly as possible in the circumstances, with safety uppermost in our minds.

Following the collapse of the tunnel we worked quickly with the contractor and the authorities to clear the railway line and get it open as soon as possible. Safety had to be our priority at all times and so the tunnel could not open until the authorities said it was safe to do so.

Throughout this incident Tesco has sought to do the right thing for everyone involved.

Our practical help so far has included:

  • giving more than £3million to Chiltern Railways to help support their business through this difficult time

  • fully funding the passenger compensation scheme devised by Chiltern Railways in consultation with passenger groups

  • compensating business tenants on the railway stations who have lost profit as a result of the incident

  • funding an advertising campaign to help Chiltern Railways get their passengers back on the line

  • offering our help with a range of local community initiatives, including working with MacMillian Cancer Relief, the revival of Latchmoor pond and the renewal of the Gerrards Cross Christmas lights.

“…the multiples can even pay their way onto a High street – one example being Gerrards Cross, where the majority of residents voted against Tesco obtaining planning permission which was eventually granted by Prescott on the basis that the railway station would be redeveloped.” – Bestway (Holdings) Limited

Planning permissions cannot be bought, and we did not “pay our way” to get planning permission for this site. We are not redeveloping the station, and it is incorrect to allege that planning permission was granted on this basis. The scheme involves work being done to the tunnel south of the station, and any changes to the station itself will be incidental and minor.

“A Budgen's store closed when Tesco won their appeal to build a massive store in Gerrards Cross.”– Consumer No.30

Budgens have denied that their shop’s closure is connected to Tesco and blamed high rents. Rod Alexander, corporate communications director for Budgens said at the time:

“The lease of the store is about to expire and the new terms do not make a renewal commercially viable.”

“Because of their size and financial resources they are able to defeat councils who oppose Tesco planning applications and deviations from approved applications. Tesco achieve this by serving appeals and deviations against planning refusals and conditions and of course Councils are cash strapped and cannot afford to contest such action - ergo Tesco backed by the might of their legal team win and can virtually do what they want.” – Consumer No.30

We work with the grain of the planning regime – a framework that the Government decides is appropriate – and our success rate for gaining planning consent is in line with our competitors. We appeal very few decisions (of the planning decisions issued to Tesco between 1 January 2000 and 31 December 2005, only 5% were subject to appeal) and only when we believe that decisions are contrary to the government's planning guidelines. Our track record shows that it pays to work in partnership with planning authorities and local communities.

“27000 tonnes of the rubbish from their tunnel collapse has been dumped, without planning permission, in an area of outstanding natural beauty 40 meters from a private dwelling for over a year and they have just negotiated with Bucks County Council for it to remain there for another year because of loopholes in the planning regulations.” – Consumer No.30

The contractor had to move the material quickly and safely to ensure the tunnel could reopen. We are of course sorry for the ongoing inconvenience to local people in Gerrards Cross.

Under planning law the landowner was allowed to store the material for 28 days. At that time a planning application was submitted for the material to be stored for longer until the material could be returned and reused, but this application was rejected. Having refused the application the County Council then served an enforcement notice against the landowner requiring him to remove the material by June 2006.

In order to ensure that the matter was dealt with properly and so that we could manage the return of the material, Tesco supported the landowner’s appeal against the Council’s decision. The sole request in this appeal was for the time period to comply with the notice to be extended. The appeal was to be determined following a public inquiry. However, following negotiations with the Council the enforcement deadline was extended to July 2007.

We have reached an agreement with a third party for the removal of the material. The removal, which started on 17 October 2006, is substantially under way and the site will be cleared by the end of the year.

*Quotes taken from an article in the Bucks Free Press, ‘I think it will bring more life to the town’ by Lucy Clapham, published 23 July 2006.