Friday, August 21, 2009

Tesco Roundup

I've always had an ambivalent attitude to Tesco. First, the plus side. I used to know the Managing Director and another Board Member very well - and liked them both a lot. I know that shouldn't make a difference, but it does. I like to support my friends, everything else being equal. I also admire the will to succeed that is so characteristic of the company. Tesco is a brilliant British success story. Now the other side, which is more based on realism than anti. Tesco know how to screw its suppliers, how to dominate markets and how to maximise profits. And Tesco is so big that it needs Government to stop the bullying. My business life has been about producing meat, which Tesco buys, though not mine directly. Farmers have never felt strong enough to counter the commercial power of such a heavyweight retailer. Tesco is a giant that must be controlled.

Anyway Tesco are dominating the headlines this weekend in Montgomeryshire. There are plans for three new supermarkets. I've supported one, been opposed to one, and am uncertain about one. Lets look at them in turn.

Firstly Welshpool, where the deal is done for a new store on the current livestock market site. An alternative spanking new market will be open for business before the end of October. We were expecting a start on realigning the town's road network next month, but it seems that the planners are insisting that the full details of the Tesco store be approved before allowing a start. We expect the supermarket to be up and running next in 2010. I've always supported this proposal.

Secondly, Newtown, where the steel structure of the new supermarket rose phoenix-like out of the ground this last week. Looks as if it will be open before Welshpool. I've not supported this development - mainly because I just do not believe the assurances given that this will not cause traffic chaos. But its too late now. We have to wait and see.

And thirdly, Machynlleth, where its being reported that a real ding dong is underway about whether it should be allowed. Not got a feel for this proposal yet. Telephoned most of my Machynlleth contacts, who all seem to be keen on the idea. The two vociferous public opponents of the development are the Guardian writer, George Monbiot, who lives in the town, and the local MP. I've been a but concerned about some of what Mr Monbiot has written. He's claiming that local councillors are afraid to stand up to Tesco, and will allow themselves to be bullied. I don't accept this at all. The local councillors are not afraid of anyone. They just disagree with the Guardian writer - and the local MP. Machynlleth Town Council voted 6-2 in favour. Everyone I've telephoned to gauge public opinion is in favour. When the MP issued a press release claiming a majority were against, I'm told he was challenged by the company and made to withdraw his claim. It seems that almost 80% of those who had attended an exhibition of Tesco's plans had registered support. Its always best to check facts first. Anyway, I shall spend Wednesday next in Machynlleth, talking to as many people as I can. Hope it helps me formulate a clear opinion.

And then there's today's UK business pages where Tesco's top finance man confirms that Tesco is going to become a fully fledged bank (creating 800 new jobs in Scotland). This is great news. A business which is based on the customer being king, entering the world of banking. About time too. So happens that the finance man concerned, Andrew Higginson, used to work in Montgomeryshire, for Laura Ashley in the village of Carno, ten miles from Machynlleth. Small world!!

16 comments:

Heledd Fychan said...

A popular blogging topic today then! Hardly surprising given the amount of coverage in the local press about it. I agree with you that every store must be taken on merit - I'm not convinved about the Newtown one either. Look forward to hearing if what the people of Machynlleth told me is the same as they told you!

Glyn Davies said...

Heledd - I've not been talking to people who are not involved in public life in one form or another - who all tell me that most people are keen on the Tesco store coming to the town. An important consideration for me is whether it is within walking distance of the town centre - which it is.

Anonymous said...

The Newtown Tesco will cause terrible traffic chaos and will keep me, for one, from going anywhere near that area. The Machynlleth Tesco on the other hand will bring much needed jobs to the area. I see nothing to fear whatsoever. Tesco has a very healthy and much admired bi-lingual policy. And the store will bend over backwards to accomodate the locals and help with town projects, sponsorship etc. There is nothing to fear and everything to gain. Lembit Opik is totally out of tune with the town and his press release was arrogant and misleading in the extreme. How dare he!

Anonymous said...

Dear dear....yet another vote loser for our part-time MP. How out of touch could he be! Overwhelmingly, Mach welcomes Tesco.

Anonymous said...

Having a large Tescos in a small town basically means the death of most independent shops.
All the butchers,greengrocers etc cant compete and close.
It depends on what you want-a lively town center of competing shops or one monolithic Tescos.

Mike said...

When I read politicians of whatever stripe singing the praises of Tesco's monopoly I just want to vomit into my cornflakes. Americans think Walmart is too big with 16% of the market whilst Tesco has 30, thats monstrous! and now this giant leviathan is going into banking! what next they will be running the NHS next. This is not even the free market.

Glyn 4 Monty said...

if it means cheaper food all power to Tesco.

If they can't compete let 'em go under ...

penlan said...

The problem lies in your noting that three Tesco stores are proposed.Tesco can locally achieve too dominant a position.Here in Swansea we have a "Tesco town" with three megastores(or whatever they call them)medium sized stores in the nearby towns and Tesco Expresses in the suburbs.It is far too much and not good for competition.When Morrison and Safeway merged,they had to sell stores where they had too much market share.I think this requirement generally should be more rigorously enforced.

Glyn Davies said...

Anons - MP is entitled to his opinion. At least he's not sitting on the fence. All of the feedback I'm getting tells me that a majority of local opinion in Mach supports Tesco. Another reason why I was not happy about the Newtown site is that its quite a long walk from the town centre - not the case in Mach or Welshpool. I'm not at all sure that you are right that a new Tesco closes other businesses down. Yes, if its too far from the town centre, but sometimes it can attract business, which is what I expect to happenin Welshpool.

Mike - So I suppose you would prefer to leave banking to those who have been running the sector over recent years. The bosses of banks have no concept of customer service - as opposed to high street front of house staff who are always polite and friendly. Tesco live by the principle of customer service. The move into banking is very welcome. Best make no comment about customer service in the NHS.

Anonymous said...

Good local stores will flourish, enven with a Tesco on the doorstep. I will do my dry goods shop in Tesco because the choice and the prices are good, but will buy things like my meat at our excellent high street butcher and my bread at the wonderful Talerddig bakery. In fact,having access to a Tesco store will mean that I will buy more meat at my award-winning butcher shop, because more ingredients will be available for me to cook more interesting recipes. And surely the fact that a Tesco store means more jobs will translate into MORE spending locally? It's a win win situation all round

penlan said...

I think your reply to Mike was unwarrented.He raised a valid point.As far as banking is concerned,the clangers were dropped at high level.A Tesco Bank will simply hoover up good credit risks leaving poor risks with no banking at all and with the rural network of branches even further threatened.What then for the local small businessman needing a supportive local bank manager.
?It is hard enough already.

Competition laws exist for good reason.The USA (that home of capitalism) is far,far more stringent on "anti trust" than we are and have a much more vibrant economy in part as a result.I note that you consider that Tesco "live by the principle of customer service".So do most of us in the private sector.

Anonymous said...

The bulk of Mach people would love to see a brand new Tesco in the town. It's about time politicians got real and embraced the advantages to us. Go stroll through Mach and talk to people. You'll find without a shadow of a doubt that is indeed the case. Croeso cynnes i chi ddod draw aton ni - dim ong gobeithio y bydd yr AS yn cadw draw.

Anonymous said...

Thise opposing the Tesco store are missing a trick. The supermarket will go out of its way to please the local and contribute to the community. It's totally in the interest of Machynlleth that Tesco comes our way.

Glyn Davies said...

Anon - That is the case in Welshpool, in my opinion that is. The supermarket has to be sufficiently close to the town centre to be a part of it. It seems that many people in Machynlleth think it is.

Penlan - I cannot see why anyone should object to more serious players in the banking sector. We needs several more. And why should a Tesco Bank be any less likely to lend 'rural' customers. I would have thought that Tesco customers would be a base from where much of its custom would come. You may well have a point about domination of the retail market, which is a matter for the competition authorities. You'll not hear me disagreeing with a judgement by the Competion Commission that there should be a limit on market share in the national interest.

Anons - There seems no doubt that Tesco have satisfied much of local public opinion. I was told that the local County Times did a 'vox pop' on the street and found that only 2 out of 50 opposed it.

Mike Parker said...

I'd like to be as optimistic as the Tesco fan club, but I do believe that their coming to Machynlleth will be a disaster.

There's a set of traffic lights on the Dyfi bridge at the moment (yet another lorry has taken out some of the masonry). Stack loads of great Tesco lorries and home delivery vans are not going to help.

And Glyn, your optimism about the store's proximity to the town centre does not bear in mind either the reality that it will be a fair walk away along a tiny pavement next to quite a nasty stretch of road, nor people's normal behaviour in supermarket shopping, i.e. drive in, shop, drive out again, especially if - as happens in more and more of these superstores - there is very well-policed limit on the time available for the free parking facility. I do not believe that it will make many more people visit the town centre shops. Tesco in Porthmadog and Asda in Pwllheli, both similarly sited in comparable-sized towns, have been unmitigated disasters for the local shops there.

Maris Piper. said...

Currently, according to a farmer friend, the potato growers in Pembroke are being offered £40 per tonne, or 4 pence per kilo for their crops, "at the gate".
Most have refused, and Tesco currently sells Egyptian, Israeli and English potatoes in their Welsh stores. From 4p to £1.40 per kilo, huge profits.

Factor in the convoluted logistics of transporting potatoes over thousands of miles, the loss of taste and nutrition = no thanks.
Tesco exists to make profits, and its business practice is not to "serve" local communities, but to shut down competition, and where ever they arrive, it`s never long before the butchers, fishmongers, newsagents, clothes shops ,florists etc are shutting down.
When they close, their shopfronts and skills are gone, and slowly each and every British town will become a clone, all contributing to the coffers of a small band of immensely powerful retailers.