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.69

Mr Petty raises concerns about the impact of the Tesco store in Ferndown on competitors in the area. He suggests that the only competition Tesco faces in Ferndown is from Iceland.

We are proud of our contribution to Ferndown. Our store currently employs around 270 people, several of whom have worked at the store since it opened 21 years ago. The store is due to be refurbished this summer and we will be making a significant investment in making the store even better for customers.

There is considerable choice for consumers in Ferndown. In addition to our store there is a Sainsbury, a Lidl an Iceland, several convenience stores (including a Co-Op, an Alldays and a Dillons), three butchers, a greengrocer and two bakers. There are also a further two Sainsbury stores, two Asda stores, a Morrisons, an Aldi and two Lidl stores within five miles of the town.

Our store is located in a shopping centre in the heart of the town. Contributing to thriving town centres is a key objective for Tesco. We believe that retail development in town centres increases the attractiveness of a town as a place for people to shop. This can bring more people to the area to the benefit of all retailers. A district planning officer commended the Tesco store in Ferndown as a good example of how retail development can be integrated into a town centre.1

Mr Petty suggests that in the 21 years the store has been open 100 jobs have been shed in the store.

Mr Petty is correct that our store now employs fewer people that it did when it opened in 1985. This is due to improvements in efficiency such as the introduction of shelf-ready packaging, and significant technological advancements such as bar code scanning. Retail employment more generally in the area remains strong. A recent report commissioned by the Learning and Skills Council on the retail sector in the Bournemouth, Poole and Dorset area showed that there had been strong growth in the number of retail jobs. Between 1998 and 2004, an estimated 15,000 new retail jobs were created in the area representing an overall growth of 27 per cent.2

1 Public Report – Consultative Draft Planning Statement (PPS)6: Planning for Town Centres, East Dorset District Council, Policy and Resources Committee, 4th February , 2004.

2 Skills issues in the retail sector in Bournemouth, Dorset, Poole, and Somerset. A report to LSC Bournemouth, Dorset and Poole, December 2006.