Growth anxiety in the midst of the Great Recovery

[The_Freeman]

Two unsettling BBC articles published today about the same thing…

Growth of the ‘big four’ supermarkets 1

Growth of the ‘big four’ supermarkets 2

Fears have been voiced about the growth of the “big four” supermarkets after BBC research found at least 577 stores were approved in the UK in two years.

Whether it is building a large retail park or a small high street store, the so-called ‘big four’ supermarkets are finding an ever increasing number of ways to expand their empires.

Those are the introductory paragraphs. They set the tone. Fear and empire-building.

They’re talking about supermarkets, for heaven’s sake. The funny thing about this is that the BBC would never use this sort of diction to describe Britain’s wars in the Middle-East. America and Britain aren’t trying to expand their empires in Iraq, Afghanistan, Pakistan, Yemen etc… No, that’s spreading democracy, freedom and security. With Apache gunships and white phosphorus, mind you. But try to sell people groceries, and you’re an empire-building monster.

Meanwhile campaigner Jessie Miller, who is fighting plans for a new supermarket in Oswestry, Shropshire, said the increase in stores was “bad for the character of our country” because it left High Streets unable to compete.

That’s a very interesting choice of words. “Bad for the character of the country.” The BBC specifically chose to use a sub-heading ‘Bad for character’.

That sounds a lot like something you’d hear from a pedagogue with regards to raising children…

Ms Miller, the group’s secretary, said she was concerned that supermarkets were “just filling in their map” and not caring about what towns needed or wanted.

This attitude is always mind-blowing.

If people in a given town did not want a supermarket, they would not patronise it. They would not buy what it has to sell. The supermarket chains will only build a store if they think it will be profitable. It will only be profitable if people choose to patronise it. If people did not want it, and the store builds it anyway, it will not be profitable.

The supermarket doesn’t come in with hired goons to wreak havoc on the High Street when they move into the neighbourhood. People living in the area make the choice to buy at the supermarket.

Campaign group Tescopoly, which opposes the growing power of the major supermarkets, has accused the supermarkets of throwing money at the planning process until they “get their way”.

Yes, clearly the stores are the problem here… Not the system which creates these immense barriers to entry which ensure that only the largest and most established players can survive. These particular supermarkets are wrong for being able to pay their way through the immense hurdles erected to prevent productive economic activity at all costs.

In Ilkley, West Yorkshire, councillors voted unanimously to refuse a planning application for a Tesco superstore following concerns about traffic problems, transport and the effect on other traders.

You can’t build a store because the government monopoly on transport in the area is inadequate, and it might result in competition. Can’t have that.

"All they are interested in is not a service to customers but a service to their balance sheet.

How does a grocery store make a profit?

"They have become far too powerful hence we do not have a variety of shops.

It’s unbelievable. We are staring a severe mental illness in its cold, dead eyes right here.

They’ve just admitted that it’s impossible to get a planning application through the muck of local government without an army of lawyers and lobbyists, and God knows what else, but that’s not what leads to a situation whereby only the oldest, largest and most powerful can survive! Perish the thought.

It goes on…

Tesco is building a £200m complex in West Bromwich, West Midlands, which includes a retail park, new school and a police station.

The development has taken a huge amount of negotiation between Tesco and Sandwell Council and has been 10 years in the making.

"Generally, local authorities have become more savvy at requesting more things to be provided by the developer.

Yes, the finances of these local authorities are so far into the red that you basically have to agree to subsidise half the public budget before they’ll let you sell food to the people.

Obviously one doesn’t expect much from the BBC, but one might naively imagine that in the midst of this recession, they would regard this sort of investment as attractive and desirable, on the face of it. You don’t expect “fear” to be the most appropriate first reaction to the BBC’s “research” people uncovering the sorded truth that supermarkets have been approved for construction by local councils.

How is it that one comes to feel fear for productive human endeavour resulting in lower prices and less scarcity for all?

[Smiling_Dave]

Great post, James

[Agamentus]

Ms Miller, the group’s secretary, said she was concerned that supermarkets were “just filling in their map” and not caring about what towns needed or wanted.

@James

This attitude is always mind-blowing.

If people in a given town did not want a supermarket, they would not patronize it. They would not buy what it has to sell. The supermarket chains will only build a store if they think it will be profitable. It will only be profitable if people choose to patronise it. If people did not want it, and the store builds it anyway, it will not be profitable.

That’s the same exact problem Wal-Mart endured during its rapid growth in the 1990’s and early 2000’s. It was building thousands of stores in the U.S. and driving local “mom and pop” stores out of business in droves. Many members of the media took a very populist approach to this lamenting the death of “small town America” as if change and progress was inherently bad. Mind you, there was absolutely no mention that people were shopping at Wal-Mart because of the lower prices, nor did they admit that saving large sums of money on groceries and consumer goods enabled poorer Americans to experience a dramatically higher amount of purchasing power and standard of living.

I did an experiment several months ago where I compared the prices of cereals at Wal-Mart to what was offered by Amazon. Amazon doesn’t need to operate a horde of stores - it has several warehouses and ships orders accordingly. Despite this, Wal-Mart still sold its cereal for as much as 15% less than Amazon did, and that was ignoring shipping costs!

The moral of the story is that media has an agenda - it’s not to tell “the truth.” It’s to sell its content. I think the lower classes have always been jealous of the higher classes, so I’m not surprised media outlets like the BBC feed the masses not what they should here, but what they want ot hear. It’s easy to justify why you don’t have everything you want - just stick it to “the man.”

Also, however, is the unfortunate tendency of people to be very hesitant to change. To quote Machiavelli:

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order, this lukewarmness arising partly from fear of their adversaries … and partly from the incredulity of mankind, who do not truly believe in anything new until they have had actual experience of it.

[Kakugo]

That’s very similar to what’s happening around here: big “retail parks” centered around a large supermarket and (usually) a consumers electronics outlet have been sprouting all over the place. Please note that differently from Britain these are almost invariably French-owned.

Like James rightly remarked the reason these projects are greenlighted is pretty obvious: local governments are always flirting with bankruptcy and such big complexes bring welcome “cash injections” in their dilapidated coffers. A large complex can provide more than a hundred million to start with and a steady flow of taxes in the following years. I may add that usually this wealth gets squandered in a matter of months but you already know that… not even my ex could spend money so fast!