Fears for shops as supermarket goes hyper

Pills, pyjamas and potatoes don't normally occupy the same shopping trolley, but the UK supermarket giant Tesco is going hyper…

Pills, pyjamas and potatoes don't normally occupy the same shopping trolley, but the UK supermarket giant Tesco is going hyper, and the weekly shop may never be the same.

The proposed hypermarket, on a site in Ayrefield, near Malahide in north Co Dublin, may not only incorporate a pharmacy and a clothes department but a petrol station as well.

The retail revolution stepped up several gears when Tesco acquired the Quinnsworth/Crazy Prices supermarket chain for £630 million last May. It may seem to have happened overnight, but the revolution's flame has been burning for some time, said Michael Duffy, chief executive of Bord Bia.

"The 1970s were the era of price, the 1980s were the era of quality and the 1990s are the era of service," he said. "One of the main issues is time, and as retailing develops the industry is looking more and more at facilitating the consumer's need for time-efficient methods of shopping."

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Similar developments sounded the death knell for much local shopping in the UK. As supermarket chains moved to the outskirts of cities, shoppers hopped into cars and abandoned local stores for the convenience of the one-stop shop. Stephen Foster, editor of Checkout UK magazine, said the demise of the independent store was almost complete in the country Napoleon once derided as "a nation of shopkeepers".

"Over the last 10 years developers had carte blanche to set up out-of-town stores on greenfield sites. This resulted in everything-under-one-roof type stores, which provide services from dry cleaning to shoe mending. The government called a halt to this two years ago. But the decline of independent stores has been significant," he said.

Fishmongers, greengrocers and butchers in the UK may be in decline but industry figures say they do not believe the same thing could happen here. But why not?

"Our planning laws would not allow it to happen," said Michael Campbell of the independent grocers association, RGDATA. This week Mr Campbell made a scathing attack on RTE for giving airtime to Tesco's new loyalty card scheme. RTE, he said, had "conceded invaluable free publicity to a £10 billion colossus that threatens 60,000 Irish jobs".

In a recent issue of Retail News Mr Campbell, who represents the Supervalu and Centra outlets among others, went further. The "extraordinary" sanction of the Quinnsworth takeover was a "clever seduction" on Tesco's part: "It can only be due to the substantial lullaby being played by Tesco management, gently lulling Government, suppliers and the media into a trance-like stupor".

The reality for the Irish retailing industry is altogether more sinister, according to Mr Campbell. He paints a pessimistic portrait of a Tesco-dominated retail industry. Jobs will disappear in distribution, with Tesco by-passing Irish distributors and cutting their annual turnover by 25 per cent as a result. Jobs will also go internally, he maintained. Irish food suppliers will be overlooked or their existing contracts dramatically diminished.

Tesco, he said, will annihilate the competition, which includes Dunnes Stores, Superquinn and Roches Stores, as well as the Supervalu and Centra stores. "Within three years Tesco will be in the position to dictate their prices and ultimately the consumer will lose out," he said.

IT doesn't matter if Tesco rejects Campbell's assertions. "Let's just say there we have a credibility problem with Tesco," he said.

A Department of Agriculture and Food spokesman described Mr Campbell's claims as "completely off the wall". He pointed to Nature's Best and Lir Chocolates, just two companies that have created more than 100 jobs as a direct result of the Tesco expansion.

"We are working closely with Tesco on this and we want as many Irish suppliers supplying as many Irish goods as possible," he said.

For its part, the largest supermarket chain in the UK has refused to enter into a debate with Mr Campbell on the issue privately, dismissing his claims as "unsubstantiated rumour".

In fact Tesco's director of communications, Dermot Breen, told The Irish Times that 25, "maybe 26", of the 27 suppliers of Premium Choice (Quinnsworth's own brand label) are to be offered the chance to supply Tesco branded products.

"Many more will also get the chance to come on board," he said. "A team of five Tesco food technologists are looking at ways to assist Irish companies in this."

Tesco is engaging in "positive discrimination" with Irish products. "It is not the norm but we are not going to de-list a single Irish product unless we find that it doesn't sell," he said.

Referring to the threat of job losses in the distribution sector, Mr Breen said this was one area of Irish retailing that was "grossly inefficient".

"We will make changes in this regard, but in the end the supplier can only benefit," he said. "With a centralised distribution set up the supplier has only to make one delivery as opposed to 30 or 40 per day".

Underpinning the Tesco ethos, he said, is a commitment to the consumer, with proof offered by the "listening campaign" undertaken by the company in recent months.

"We have held more than 200 meetings, listened to thousands of customers and heard the views of 1,000 members of staff," he said.

So what do Irish consumers want? They want the same Quinnsworth staff and Tesco to continue stocking guaranteed Irish produce. They want promotions, loyalty cards and special offers, anything to liven up this mundane weekly chore. They don't mind the Tesco name change, but they want only the freshest of foods stocked in the Tesco outlets.

And Tesco said it is perfectly happy to oblige. It has a commitment to refit, upgrade and rebadge all Quinnsworth/Crazy Prices stores in the State. Six new stores will be opened by the year 2000, and up to half of these could fall into the hypermarket league. On Tuesday the doors of the first ever Tesco store will open in Athlone.

Meanwhile, Michael Campbell of RGDATA will do his utmost to warn the Government, the media and anyone who will listen about the dangers of the ever-advancing Tesco invasion. "But we are not being listened to," he said.