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.

Consumer No.27 Mrs Tanous

Mrs Tanous claims that the opening of a large Tesco in Hove has had a detrimental effect on nearby independent shops. She claims that a butchers, men's outfitters and gift shop closed following the opening of the store.

We are disappointed that Mrs Tanous feels that Tesco has had a negative impact on Hove. Our feedback from residents of Hove has for the most part been positive and the store remains popular with customers. We do not believe that our store would have led to the closure of the nearby independent shops Mrs Tanous mentions because the range in our store does not greatly overlap with the goods sold in these shops. It does not sell clothing, stocks only a small non-food range and does not have a wide range of gifts or a fresh meat counter.

Moreover, our Hove store has brought many benefits to the town. The store has regenerated a site previously used as a gas works. It has proved to be very popular with customers and in the first five moths of opening it attracted 30,000 shoppers to the vicinity. It has brought increased choice and convenience for shoppers. Our store has also brought new product ranges to Hove such as Kosher and Afro-Caribbean ranges. Previously customers had to travel some distances to buy these goods.

While we acknowledge that not everybody feels the same, we have had some really good feedback. As one local resident notes:

"It's brilliant – this area's been crying out for a decent supermarket. I only live around the corner so I don't have to use the car. There is a good range of products too. My daughter has various food allergies and the gluten-free range is especially useful."*

The store was also praised by a local resident on the BBC website:

"Why criticise Tesco? They have obviously been so successful in meeting the needs of the consumer!! Our local large Tesco opened 18 months ago, and its arrival was well needed. The only other local supermarket was always out of stock of basic items (milk, bread, vegetable) and was (and still is!) overpriced! Tesco deserve the profit for the effort that they have put into providing what customers actually want!! Maybe the other supermarkets can now take a leaf out of their book!"**

These views were echoed by many of the town's residents when researchers from "The Grocer" magazine visited the town a year after our store opening:

"The vast majority of shoppers told us the store was just what Hove needed and praised the standard of the products and service – an attitude that was reflected by the local business association, which took the view that such a high profile retailer could only be good for trade because of the extra footfall it would pull into the town."

Our staff in Hove work very hard to engage with the local community. We have donated community vouchers to the local church and our donations have helped the local school to build a new playground. Our store manager is also part of the Local Business Forum which brings together local businesses. Among other things this forum helps us communicate with other traders, sharing our knowledge and discussing ways in which we can co-exist to improve shopping for residents of Hove.

In fact, many places prosper in the presence of supermarkets. Research conducted in Beverley, East Yorkshire, Ludlow in Shropshire, and Gaywood and Downham Market in Norfolk shows that the presence of a Tesco store can significantly increase footfall to an area and many businesses experience an increase in trade. The fact is that in any town over a period of time there is churn of retailers. The mix of retailers may alter and many factors contribute towards changes in the High Street.

Mrs Tanous also claims that we do not allow shoppers to freely use the Tesco car park.

Mrs Tanous is right that we restrict the use of the car park to two hours, in order to ensure the car park is available for customers and not clogged up with non-store users. For many shoppers, two hours is adequate time to use the store and visit other nearby stores. We have experienced problems with people using the car park other than for shopping and the restrictions are in place to prevent this.

* The Grocer 16/10/04

** http://news.bbc.co.uk/1/hi/talking_point/4183965.stm