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.

A Business Owner In Woolwich (Mr Chater)

A small business owner has raised concerns about plans for the redevelopment of Love Lane, Woolwich. Greenwich Council is applying for compulsory purchase powers to acquire an area of land which includes property from which Mr Chater runs an MOT business.

Our Woolwich proposal

The redevelopment of Love Lane will play an important part in the redevelopment of Woolwich. As part of its long-term vision, Greenwich Borough Council is about to embark on the largest investment programme in the borough for over 100 years, and our store is part of the redevelopment of the area.

As the Council told the Competition Commission, "Tesco have matched the Council's ambition in the regeneration of Woolwich. It can take a long time to assemble a brownfield site but they have moved quickly to reach a development agreement with the Council. Tesco is the first company in many years to bring forward a major commercial development in the town centre. Prior to this the town has been characterised for many years by under investment and decay, with very poor indicators of poverty and deprivation."1

The development will include many new homes, shops, offices, and a library as well as a new superstore. It will also provide a safe, secure and attractive environment for the residents of Woolwich, and is a good example of one of our Regeneration Schemes. We have undertaken other schemes in deprived areas which most retailers view as too risky or complex to enter. In fact this development was initially led by St James Investments Ltd, who started talking to Greenwich Council around ten years ago about potential development on this site. We were the first retailers who would commit to the scheme and accept the level of risk of the investment.

We are working closely with St James Investments and Greenwich Council to improve this part of Woolwich. This is only one of several schemes in the town centre which will complement each other and promote local regeneration. To ensure that this can happen the Council is applying for compulsory purchase powers to cover a number of properties, a decision that the Council did not take lightly. Compulsory purchase orders are only used as a last resort when they are absolutely necessary to unlock barriers to development. The redevelopment of Woolwich will, when completed, bring significant benefits to the area and to many local businesses.

Mr Chater's concerns

We do understand that a development such as this can cause disruption during the assembly and construction of the scheme, and we understand that for a small number of businesses this is a difficult time. While we regret difficulties are being caused to existing businesses in Woolwich, we are working with the Council to help regenerate the area and make Woolwich a vibrant, modern place where people want to work, live and visit.

Mr Chater leases property on land necessary to deliver this regeneration scheme, from which he runs an MOT business. The Council has been meeting regularly with Mr Chater, spending a great deal of time trying to find a location which would allow him to continue to offer MOT services to local office workers. Ultimately the Council has been unable to identify any suitable sites for a relocation and therefore he will be fully compensated for the closure of his business. The Council has indicated a willingness to pay for him to have a valuation survey, and is also trying to see for how long it might be possible to work around him to allow a few months more trading.

The benefits of the scheme

The new store alone will create over 400 new jobs as well as almost one thousand new homes in the Thames Gateway area. The site involves the assembly of several parcels of land and we and the Council are negotiating with several land owners. We hope to secure the rest of the parcels and begin trading no later than 2011.

We held a public exhibition to give people an opportunity to come and view the proposals. The exhibition proved a great success, attracting a wide range of local people interested in finding out more about the plans. Over 71% of local people said they believed the proposals would help achieve regeneration in the area, and we received many positive comments from the exhibition:

"Very supportive of the proposal. Will assist in the regeneration of greater Wooolwich."

"An excellent and well thought-out scheme."

"It would help Woolwich and improve the area and make people want to shop and live there."

Many people had suggestions as to how the proposals could be made even better, which were carefully considered by the team and many of these have been reflected in the final scheme design.

1 Submission on CC website from Greenwich Council.