Benefits of Supermarkets: Society and Consumerism

Introduction

Supermarkets are easily the most ubiquitous feature of the geographic, commercial, and social map of the United Kingdom. In a country where 80 % of the expenditure on foods occurs in the retail outlets of five supermarket chains, Tesco, ASDA/Wal-Mart, Sainsbury’s, Morrison, and Waitrose, such organisations dominate and influence customer decisions in cities, towns and even smaller settlements (Harvey, 2000).

Self-service stores that sell an extensive range of food, non-food, and household products in large, brightly lit, conveniently stacked and well organised premises, supermarkets have brought about significant alterations in the way people purchase food and other household needs (De ChÂtel & Hunt, 2003). A few decades ago, in the 1950s and the 1960s most UK residents bought their food and household items from greengrocers, fishmongers, butchers, food stores and markets. Today the overwhelming majority of such purchases in the UK, which have multiplied many times to cross 100 billion GBP, occur in supermarkets (Nicholson-Lord, 2004). Wal-Mart is one of the world’s largest companies by way of turnover. In the UK, 33P in every pound spent on food occurs in a Tesco store (Ghost Towns, 2006).

CHART 1: SUPERMARKETS IN THE UK

Very obviously supermarkets would not have been so stupendously successful if they had not been able to satisfy important customer needs and concerns! Notwithstanding such logic, supermarkets also attract strong criticism from various quarters that include political figures, activist groups, environmentalists and concerned citizens, for their harmful impact upon local suppliers, local jobs, traffic, pesticide use, food wastage, greenhouse emissions and wastage of energy resources.

Discussion

2.1. Benefits

Whilst most of the existing supermarkets in the UK have been functioning for several decades, they morphed from counter service shops to self service outlets only in the 1960s. The last few decades witnesses an exponential increase in their number, their sales and in the volume of customers handled by them. With 80 % of the total foods expenditure in the country being spent in such supermarkets, their domination of customer minds and intents is nothing short of frightening.

The success of supermarkets stems from the various perceived benefits they provide to customers, chief of which are economy, quality, and choice.

CHART 2: ADVANTAGES OF SUPERMARKETS (Source: Harvey, 2000)

2.1.1. Economic Prices

Supermarkets prima facie provide their customers with more economically priced products. Their large size, their strong cash flows, their ability to pay on time, and the vast range and quality of goods they purchase, enables them to drive hard bargains with their vendors and drive down producer prices (De ChÂtel & Hunt, 2003). Efficient management practices in usage of staff, facilities, and supply chain management enable supermarkets to reduce their costs and pass on the benefits of such cost reduction to their customers (De ChÂtel & Hunt, 2006). Strong competition between rival chains and the need to keep supermarket prices lesser than those at corner shops and markets lead to further pressure on prices (Harvey, 2000).

2.1.2. Quality and Range

Supermarkets pay attention to providing items of acceptable, rather high quality to their customers (Blair & Hitchcock, 2001). They have stringent quality control measures in place to assess quality, especially so in case of fresh, processed and cooked food products, both at the producers’ and at their ends (Blair & Hitchcock, 2001). Whilst quality improvement at supermarkets has been driven by the constant prodding and watchfulness of customer and activist bodies, there is general agreement on the sustained efforts of the major supermarket chains towards improving and standardising product quality (Blair & Hitchcock, 2001).

Another trait of supermarkets is their constant focus on increasing their range of available products (Blair & Hitchcock, 2001). Supermarkets aim to provide the widest possible product and price range to customers. Driven by customer choice, supermarket products are also further segmented to attract low, middle, and high income budgets (Blair & Hitchcock, 2001).

2.1.2. Quality and Range

Apart from these specific areas, supermarkets have increased the shopping convenience of their clients by providing clean and comfortable shopping environments, good and ample parking facilities, continuous and responsive attention to changing market tastes, convenient stacking and trained and cheerful shopping staff (De ChÂtel & Hunt, 2003). Supermarkets are also significant employers, the sector providing employment to approximately 8,500,000 people in the UK. The advent of supermarkets is generally associated with improvement in local employment figures, improvement in local business environment and enhancement in property prices (Environmental Impact, 2005).

The recent surge in online supermarket sales indicates strong customer approval of the convenience of ordering for a range of products from the comfort of homes, offices or other destinations and having them delivered to specified addresses (Jaffee & Masakure, 2005).

2.2. Disadvantages

Despite such explicit and implicit advantages, supermarkets have faced and are facing intense criticism from different quarters. The main criticisms levelled against supermarkets are discussed below.

2.2.1. Threats to Other Retail Shops

With the median size of a supermarket outlet being in the region of 30,000 square feet, the rapid increase in their numbers and their super-efficient operations pose an enormous threat to independent shops (Environmental Impact, 2005). Thousands of grocery shops are going out of business every year because of competition from supermarkets; the enlargement of the products stocked at supermarket outlets to include non-food products like apparel, electrical items, DVDs, CDs and books, financial services, pharmaceutical products and photo development implies that most High Street shops must inevitably meet the same fate over time.

The increase in the range of shopping alternatives (like farmers’ markets and shops, and direct sales) in recent years, in addition to traditional markets and shops, notwithstanding, all High Street retailers are under increasing threat from supermarkets (Environmental Impact, 2005). The perception about supermarkets providing customers with choice can thus also be inversely viewed as the erosion of real choices (Environmental Impact, 2005). Domination of food sales by large chains, as per the Competition Commission, can take away the pleasure and choice of shopping at local greengrocers and butchers (Environmental Impact, 2005).

Media and public pressure on the need to curb such expansionist policies, as well as investigations by the Competition Commission have led to the top retailers adopting a Code of Practice, a code that has now been in force for some years (Wallop, 2009). There however appears to be substantial public dissatisfaction on the inadequacy of such measures and the need to intensify supermarket regulation (Wallop, 2009).

2.2.2. Local Impact

With the approximate median size of supermarket retail stores being in the region of plus 30,000 square feet, the opening of a new well stocked and economically priced supermarket store is invariably accompanied by the progressive demise of local shopping alternatives, concentrated food retailing at the supermarket location and significant build-up of traffic (Environmental Impact, 2005). Such developments lead to additional consumption of fossil fuels and emission of greenhouse gases (Environmental Impact, 2005). Supermarkets located in edge of town locations encourage people to drive for longer distances far more often than in the past with environmentally unfriendly effects, much of which is local in nature (Environmental Impact, 2005).

The elimination of local retail shops can cause serious inconveniences, especially with regard to access to food, for people from lower income groups, the old and those without cars (Environmental Impact, 2005). With recent surveys finding strong biases towards local shops in lower income and multi-ethnic localities, the entry of supermarkets in such areas often causes significant difficulties to local inhabitants (Environmental Impact, 2005). Takeovers of convenience stores by supermarket chains, especially when accompanied by closure of in-store post offices, can deprive local communities from easy access to a post office (Environmental Impact, 2005).

2.2.3. Employment

Supermarkets are often associated with provisioning of jobs for local people and increase in gainful employment; indeed the bulk of their justification for planning permission in lower income urban areas is based upon such claims. The actual facts are however quite disturbing. Supermarkets employ proportionately far lesser people than convenience stores in order to achieve the same amount of turnover (Environmental Impact, 2005). Smaller retail stores, even though they account for only 15 to 20 % of grocery sales employ approximately 500,000 people in the UK, even as supermarkets, which sell about 80 % of grocery sales employ just about 770,000 people (Environmental Impact, 2005). This fact is borne out by the fact that employment in the grocery sector is growing at a much lesser pace than sales (Environmental Impact, 2005). Social activists thus feel that whilst supermarkets do create jobs, they do so extremely slowly, the benefits of which are further eroded by the loss of jobs that inevitably arise from closure of small retail stores (Simms, 2003). Local councils wishing to increase employment should, such experts feel, focus on encouraging small shops rather than on giving permissions to supermarkets.

2.2.4. Environmental Impact

Supermarkets, for all their perceived benefits, are known for being causal in a range of environmental problems. At the local level, environmental problems occur because of regular traffic congestion and noise pollution caused by delivery trucks (Environmental Impact, 2005).

The determination of chains like Tesco to increase their sourcing of organic products from overseas growers in order to reduce prices at their outlets could force UK farmers to move away from organic farming and take up regular chemical pesticide and fertiliser based farming; this could have harmful effects, both on farmland and on consumers (Nicholson-Lord, 2004).

The exacting quality standards forced by supermarkets upon their suppliers, especially in the case of fruits and vegetables, (which need to conform to standards regarding size, shape, colour and uniformity), often leads to high levels of wastage, as well as to greater use of pesticides at the producers’ ends (Maxey, 2006).

2.2.5. Increasing Focus on Imports

The increasing focus of UK supermarkets on imports is leading to progressively lesser consumption of food items produced in the UK, lesser opportunities to local businesses to grow and improve with time, enormous consumption of fossil fuels on transportation, and consequently increased carbon emissions (Nicholson-Lord, 2004).

Conclusions

Whilst the growth of UK supermarkets is convenient in many ways for consumers, it is also harmful to the country’s society and environment. Ignoring the number of social and environmental red lights that are now flashing is foolhardy. With the pressure on government growing to step up regulation of supermarkets, it is also high time for supermarkets to become more accountable to the markets and societies they serve.

References

Blair, A., & Hitchcock, D. (2001). Environment and Business. London: Routledge.

De ChÂtel, F., & Hunt, R. (2003). Retailisation: The Here, There and Everywhere of Retail. London: Europa

Environmental Impacts of Supermarkets. (2005). “Friends of the Earth”. Retrieved November 21, 2009 from www.foe.org.uk/resource/briefings/checking_out_the_environme.pdf

The Daily Mail, (2006). “Ghost Towns; MPs Fear the Unchecked Expansion of Supermarkets Such as Tesco Will Destroy 40 per Cent of Britain’s Small Stores by 2015, Creating Cloned High Streets”. (2006, February 15). The Daily Mail (London, England), p. 22

Harvey, M. (2000). “Innovation and competition in UK supermarkets”. Supply Chain Management, 5 (1): 15-21.

Jaffee, S, & Masakure, O. (2005). “Strategic Use of Private Standards to Enhance International Competitiveness: Vegetable Exports from Kenya and Elsewhere,” Food Policy. 30: 316–333.

Maxey, L., (2006). “Can We Sustain Sustainable Agriculture? Learning from Small-Scale Producer-Suppliers in Canada and the UK”, The Geographical Journal, 172(3): 230.

Nicholson-Lord, D. (2004). “The Food Revolution That Lost Its Soul: As Organic Produce Booms, Supermarkets and Big Processing Companies Have Moved in. Does It Matter That the Pioneers Are Pulling Out?”. New Statesman, 133: 24-40.

Simms, A. (2003). “The Rise of the British Ghost Town: Butchers, Bakers, Post Offices and Newsagents Are Closing in Their Dozens, Leaving Dead Communities and, in Effect, a Commercial One-Party State”. New Statesman, 132: 34-45.

Wallop, H. (2009). “Rip off Britain? No, UK has cheapest supermarkets”. The Telegraph, Retrieved November 21, 2009 from www.telegraph.co.uk/…/Rip-off-Britain-No-UK-has-cheapest-supermarkets.html