Tesco attacked by Labour as ‘almighty conglomerate’

Party claims other supermarket chains are likely to lobby for tougher competition laws to keep Tesco in check Tesco has become “an almighty conglomerate” abusing its unfettered market power to dominate towns at the expense of small retailers, Labour claimed as it called on the government to confront the chain. Labour also warned that a government- commissioned review into the future of the high street , led by the broadcaster and retail guru Mary Portas, is likely to involve other supermarket chains lobby for tougher competition laws to prevent the further dominance of Tesco. The shadow local government minister, Jack Dromey, said: “Tesco want to rule retail, in particular the southern swath of England. It is simply not right that you can have one almighty conglomerate using its market power at the expense of the high street, and other retailers, particularly small struggling retailers.” It is unusual for Labour to pick out one supermarket for such fierce criticism, but Dromey said Tesco was the worst offender involved in a chain of events that is destroying community life. He said: “High streets have become like ghost towns with local retailers out of business with dire consequences for communities, the poor, the elderly and those without access to cars. This is a deeply felt issue all over Britain.” Dromey called on the Portas review to recommend a “competition test” to prevent grocery retailers acquiring a dominant position in a locality. He said: “I think Tesco may find themselves in a minority of one trying to object to that, and the government have got to have the courage of their convictions to face Tesco down.” Dromey said the government was facing furious lobbying by Tesco. But he added: “If you want a healthy diverse high street then you cannot have a dominant retailer acting in its own interests, and not the interests of the high street.” He challenged the way Tesco “sell themselves as a major creator of jobs”. He argued the net effect of its expansion may have been to reduce total jobs in the retail sector. “We are not anti-supermarket, but one in six shops are standing empty, so this is serious,” he said. Since the general election the big four multiple retailers have opened 407 new stores, and added more than 5m sq ft of selling space. Many would have received planning permission before the election. Labour’s intervention follows Ed Miliband’s argument that the revival of communities must be underpinned by preserving institutions, including the high street, through competition law. The government announced the Portas review in May, with a report due in October. It is possible that Labour’s call for a competition test will feature in her report, especially if rival supermarkets, such as Asda and Sainsbury, support the measure. Two months ago, Portas revealed her determination to act, saying: “The rise of the supermarket giants – and our love affair with them – is killing Britain’s small shops. We’re sacrificing not just our greengrocers, our butchers and our bakers, but also our communities for convenience.” Dromey remained open-minded about the review, saying: “The thing is we want real shops, not talking shops. At the heart of the decline of high streets all over Britain has been the unchecked flight of the supermarket to out-of-town shopping malls.” In a sign of government concern, the Department for Communities and Local Government announced a ”town centres first” policy in their national planning policy statement last week. The communities secretary, Eric Pickles, has relaxed centrally imposed rules on parking restrictions so that councils can create additional spaces to attract shoppers from the free car parks of supermarkets. Dromey said the measures were a start, but that planning authorities should have to devise retail diversity schemes that put as much emphasis on small shops as big chains, and control the trend to smaller supermarkets in inner city areas, pushing independents out of business. In autumn, a cross-party group of peers will try to insert a version of the clause in the localism bill. The government minister, Lord Taylor, appeared largely unsympathetic to the idea, saying: “Town centre planning policy is not pro- or anti-supermarkets. “Planning cannot seek to restrict lawful competition between retailers; in fact, planning policy is blind to whether the operator of a retail proposal is a supermarket or an independent.” Tesco contends that its inner city convenience stores are good for the high street. “We have brought back into the heart of many towns and district centres the benefits that shoppers expect from a supermarket, that were previously available only in the large out-of-town stores. Supermarkets have increased choice, and hence the attractiveness of local centres as shopping destinations. Tesco stores have been demonstrably good for the high street and neighbourhoods, not a threat to them, just as the planners envisaged.” Tesco added: “Studies have shown that an investment by Tesco in a town or high street means that the town and high street benefits. The reason it benefits is because people stay in the area, they do linked trips and those linked trips cause other retailers to open”. Tesco Supermarkets Retail industry Labour Planning policy Ed Miliband Communities Regeneration House of Lords Patrick Wintour guardian.co.uk

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