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Last Updated: Friday, 21 January, 2005, 11:16 GMT
Is Tesco taking over?
Tesco delivery lorry
After record Christmas sales Tesco remains on course to make profits of 2bn this financial year.

The supermarket giant helped achieve this with 100 Tesco Extra stores which combine food and non-food items such as clothes, health products and DVDs.

The tills at Tesco currently take one in every eight pounds spent in British shops.

Is Tesco taking over? Is this at the expense of independent and corner shops? Do you shop at Tesco? If so, why? Will other supermarkets make a comeback? Send us your views.

This debate is now closed. Thank you for your comments.


The following comments reflect the balance of opinion received:

People can't ask for low prices and yet complain when smaller companies are forced out of the market... simple economies of scale mean that larger stores can offer lower prices. You have to make a choice between low prices or independent business!
Shiraz, Cambridge, UK

It's all very well congratulating Tesco on doing a fine job and providing the customer with what they want. I can't argue with that. However, surely Tesco's growth, and their undeniable pursuit to provide this excellent service is all in the name of competition, and winning customer share from their competitors. However, the situation we are now faced with is the company becoming too big, wiping out local competition, and even more worryingly other larger supermarket chains. What will happen when the customer is suddenly faced with not being able to choose where they shop? The lack of future competition could mean that Tesco no longer has real competition and they can then dictate prices, quality of their goods and quality of service they provide!
Jason, Bristol, UK

Large stores have always been built in town centres in Holland. It is far better to bring goods within walking distance of the people. In Switzerland planning consents for building new stores insist that village shops affected in the surrounding region are supplied by the supermarket giant at the same wholesale cost, regardless of trading volume. The Tesco bulldozer approach to other traders in British high streets is the fault of the lazy planning system in the UK. If local people don't like Tesco's growth they must elect councillors and governments who will create a more robust and interlinked planning framework, to address local needs.
Tom, Netherlands

I think Tescos are so successful because of 24 hour shopping. Why open when people are at work and close when they come home? Regular retailers need to realise that they have to break with tradition and not expect households to have a daytime person that does all the shopping. Those days are past.
Mark Large, Cardiff

As long as the consumer wants cheap products and convenience, the big guys will win through
Georgina, Germany
Tesco are riding the crest of an inevitable wave. We've seen it all happen in the US. The small private industries have mostly died and given way to huge franchises and a mall culture. These franchises have such buying power that the only businesses that can feed their needs in terms of volume and price are mass-market low-quality producers. Hence the small family-based farmers also go out of business. The whole model is rotten to the core. But as long as the consumer wants cheap products and convenience, the big guys will win through. Shaking our heads is not good enough, vote with your feet!
Georgina, Germany

I use Tesco all the time simply because I do not drive a car and can shop at Tesco in my own home through the internet and have my order delivered to my door within a day or two. All the big supermarkets are out of the town and I need two buses to get to one. On the one or two occasions I went out of town to a supermarket, waiting at the end of endless queues of people with overflowing trolleys. I now do all my shopping with Tesco on the internet and don't have to worry how I am going to get all my heavy things home. This Christmas I didn't go near a shop. Viva la Tesco.
M Grant, Aberdeen

Tesco is the biggest because of their strategy. Similar to Walmart they have expanded their selection to include high margin electronics, clothing and other non-food items so they can subsidize their low margin food retailing. People go to buy food but walk out with a lot more. If you want quality food then go to the local butcher, farmer's market etc. Tesco's only competitor is Walmart/Asda. The other supermarkets will need to find their niche otherwise they will disappear.
Bill, St. Louis, USA

Tesco should be wary about increasing its market share within the UK beyond 29%; no one likes companies in near monopoly positions and hence will trigger a backlash; especially if it continues to export back office jobs to India. Tesco does need to grow in size to compete internationally but it should carry out the expansion abroad.
Paul R, Cambridgeshire, England

Another swipe at anything that is successful in the UK. When will they learn that wealth production is good for the majority? Good on you Tesco keep up giving us what we want.
John Karran, Liverpool, UK

It's such a pleasure to visit the great town centres in the UK when we go there
Brian, Portland, MI, USA
As a UK ex-pat living in the US, I despair at the increase in large-store shopping in the UK every time I go 'home'. US town and city centres are commercial wastelands compared to those in the UK and Ireland. It's such a pleasure to visit the great town centres in the UK when we go there. They no longer exist in the US. High streets are totally dead. Shopping in the US now consists of trawling through soulless out-of-town strip-malls crammed with copycat nationwide franchise stores with no originality or local colour. Don't let it happen in the UK!
Brian, Portland, MI, USA

It's the price we pay for demanding ever cheaper food. But that also means rural jobs are cheap, animal welfare is cheap, the cost of caring for the environment needs to be as low as possible. We'll get cheap food, and gradually wipe our countryside clean; short termism, just so we can be rich for a bit.
JC, Hants, UK

Much though I have my reservations about Tesco, it is not surprising that they are taking business from small traders. Our local stores seem to think it is wise to close on Saturday afternoon - leaving only Saturday morning out of the whole week when they are accessible to working people (i.e the people with money to spend).
Tony, Ampthill, UK

I wonder if there will be small business owners in the next generation
Norman Holmes, Raphoe, Ireland
I live in Ireland and we have Tesco here too, although the government limits the size of the stores, and bans below cost selling. As the owner of a small business for 30 years and regularly working long hours, I wonder if there will be small business owners in the next generation. I certainly wouldn't encourage my own family to follow in my footsteps. And yet if all the manufacturing jobs go to China/ India where will people find work to earn money to shop in the superstores?
Norman Holmes, Raphoe, Ireland

Tesco is doing what they are in business to do - make money and the result of that is more jobs and more money for the economy, so we will benefit. I do feel that perhaps the Government should give local fishmongers, grocers and butchers and other local shops breaks and support. Improved transport and local parking would perhaps encourage people to go locally rather than go to central locations where Tesco is with ample bus services and parking.
Paul, Edinburgh

We now have 4 Tescos in Colchester - thankfully local protests and sensible planning decisions have prevented a 5th. Funny how the best local deli recently had to close down and the town no longer has a fishmonger. How long the one remaining high class butcher will last is anyone's guess! I for one am doing my best to support local stores and avoid Tesco's sprawling!
James Bates, Colchester, UK

They have obviously been so successful in meeting the needs of the consumer!!
Darren, Hove, UK

Why criticise Tesco? They have obviously been so successful in meeting the needs of the consumer!! Our local large Tesco opened 18 months ago, and its arrival was well needed. The only other local supermarket was always out of stock of basic items (milk, bread, vegetable) and was (and still is!) overpriced! Tesco deserve the profit for the effort that they have put into providing what customers actually want!! Maybe the other supermarkets can now take a leaf out of their book!
Darren, Hove, UK

Tesco are becoming too big for their own good. We have one of their largest superstores in Europe here at Hampton in Peterborough which sadly whacks out plenty of quantity but little quality and even less service. I recently asked the fresh fish counter to cut me a single portion only to be told quite brusquely that it was not company policy to do this as they might be left with a portion they would be unable to sell. Does not pride come before a fall?
Peter Morgalla, Peterborough, Cambs

Tesco offers what the customer wants, when they want it and at a price they are prepared to pay. People may say they are prepared to pay a bit extra to eat organic vegetables or free range meat but they actually speak with their wallets. It's down to the competitors of Tesco to woo the consumer with something different.
John, France

Legislation curbing the growth of these companies should have taken place years ago
Iain Ferguson, Bristol, UK
It's hard not to see why Tesco is the biggest, ask any supplier of fresh food (none processed) what it's like being on the end of Tesco's or any of the others' "buyers". Until people start understanding that less isn't more then unfortunately real food will simple disappear under a sea of processed unhealthy pre-cooked food. People have to make a decent profit from growing food or else they cannot survive. Supermarkets make very unhealthy profits from the losses that food growers incur. Supermarkets will eventually control the food in this country and I, for one, don't like it. Legislation curbing the growth of these companies should have taken place years ago to allow small business to thrive along with larger companies, as in France. Shame on all governments over the past 20 years.
Iain Ferguson, Bristol, UK

It's not Tesco driving customers away from my local town shops, it's the inconvenience of never being able to park in the town, paying a fortune for a parking space if you are lucky enough to get one, and the fact that that there are few shops to make it all worth your while.
Steph, Sleaford, Lincs

I work for a rival retailer and see that Tesco is becoming a leviathan. They are taking over in every possible area, reducing choice for customers in the long run and squeezing suppliers until they bleed. Their supplier policies are well known, keep cutting margins or we will put you out of business (ruthless). In the long term suppliers are consolidating and therefore increasing their power. Eventually Tesco's policy of supplier management will come back to haunt them. When the suppliers increase their power base they will lock horns with Tesco, unfortunately to the detriment of the consumer. You can only keep reducing prices for so long, it is not a sustainable practise.
Anon

If you don't like Tesco, don't shop there
Mark Massetti, Milton Keynes
Why oh why do we bleat about success in this country? If you don't like Tesco, don't shop there. We use Tesco, Waitrose, John Lewis, whatever we want to. So what about Tesco's dominance, good luck to them.
Mark Massetti, Milton Keynes

I use Tesco, mainly because it is open when I get home from work, whereas the other "local" shops close at 5.30 which is no use to me. If Tesco are dominating, it's because they offer people what they want, when they want it.
Alan, Northampton

Isn't it a phase? If you look back about 20 years Tesco had food stores and clothing/homeware stores across the country. It then had to close down most of the clothing stores and many of the food stores due to poor economic forecasting, which its competitors were better able to address. It's now growing again, taking over small businesses and opening new stores on every empty site it can find. Won't it overstretch itself? Again?
Carys, London

If Tesco are making such huge profits, why can't they do something about their abysmal trolley management. Our local area is home to dozens of dumped Tesco trolleys - it's a disgrace.
Paul, UK

If you don't like Tesco taking over don't go to their shop
Tim, Exeter
If you don't like Tesco taking over don't go to their shops. Butchers and Greengrocers offer far better service and better food...shop there it only takes a little more time!
Tim, Exeter

Carl Marx said that capitalism would be the generator of its own downfall. If companies like Tesco keep on driving down prices so UK suppliers go out of business and then resort to buying from cheaper markets overseas where are the customers in the UK with money to buy the goods going to come from?
Roger Bull, Bookham UK

As someone who used to work for a supermarket supplier I can definitely say that they certainly have far too much buying power. Who do you think pays for all the "buy one get one free" offers? The supermarkets? Not on your Nelly! It comes out of the suppliers marketing and advertising budget. And as to the point raised by Dave from Cardiff, there are very many areas where the supermarkets have completely closed all the local shops so people don't have any choice.
Gordon, Staffs UK

I am not sure if it because there is not one near me but I have never been in a Tesco! I see Tesco as being rather bland, big and boring, rather like Asda, and much prefer Sainsbury's and Somerfield.
Jon Harrison, West Derbyshire, England

I'm currently living in France - which manages to have massive hypermarkets and in my opinion around twice as many supermarkets as the UK. Yet they also have loads of bakeries, shops and markets. I believe this is because the French government "reigns in" the likes of Carrefour, Auchan etc by for example banning TV adverts for them; forcing the supermarkets to buy fruit and veg from local wholesalers and banning the selling of products at a loss to undermine opposition. The supermarkets are just as competitive as UK ones (if not cheaper for groceries!), yet other retail survives as well. It can only be down to Tesco and the like wanting much higher profit margins.
Chris, Allier, France

The public vote with their feet. Tesco currently have the largest share of the market because they have the best strategy, products and price. People still have the choice of local shops or superstores and Tesco is winning the business (but every dog has its day). If people stopped complaining and came up with a better idea, they too could be making billions - or donating it to a worthy cause. I can't wait!
Dave, Cardiff, UK

I used to shop in Tesco until I saw a documentary on how they sourced their products, and dealt with their suppliers. The branch in our area is cramped and unpleasant to shop in and so I have a 40 mile round trip to my nearest Waitrose, where I am assured of foods sourced from British Farms, helpful, friendly and polite staff and a very pleasant environment in which to shop. Also I am lucky to live in a small market town, where we benefit from two family owned butchers, a greengrocers and a couple of bakers, and twice a month a very good farmers market. Who needs Tesco.
Paul, Yate, England

Looks like we are heading for the "Walmart Phenomenon" that has taken over the US. While it is hard to see them taking over the other supermarkets in the UK like has happened in the US, small shops of all kinds as well as chain stores that sell electrical items, sports equipment and clothes, among other things should beware. These may be their last years.
Anon, UK

Although low prices are great I prefer to pay more to support local food producers
Julia, Cambridge, UK
Ever since I came back from a visit to Norway, where the shops were full of Cambridgeshire's celery to find that our local Tesco got its celery from abroad, I have really tried to use our local farm shops and butchers more and go to Waitrose for the rest as they try and source locally. Although low prices are great I prefer to pay more to support local food producers and I think I get better quality too. If I have to forego some of the crisps, chocolate and alcohol to balance the budget that's no bad thing either.
Julia, Cambridge, UK

As a shareholder and a customer, long may Tesco continue to lead the market. A great British company.
Martin, UK

As a supplier to Tesco I am in no doubt that they are too powerful. Whilst many of the criticisms that can be levelled at Tesco also apply to their competitors, Tesco are willing and capable of using their power in a far more aggressive manner. Having been constantly threatened with de-listings, I have been forced to reduce my margins each year for the last four. Ultimately I have to try and break even and this has resulted in a reduction of the flavour quality of the products supplied in order to try and regain profitability. Who loses? I do as I want to sell a higher quality product for a fair price; the employees of the company I work for do as their jobs are 'rationalised' and the consumer does - they think they are getting the same consistent quality as they were a couple of years ago and they are not. Who wins - the Tesco shareholder.
Anon, UK

Come on, let's admit it: most people want cheap stuff, and don't care about the consequences. Whether it's suppliers being bullied in the UK, or slave labour in the Far East - people just want to save money. It's not the fault of Tesco, it's the fault of the customer, and that's not going to change.
Tony, UK

If you care about food, how it is produced (ethically & humanely) then go somewhere where they can tell you the source of the product, how much insecticide has been used, how much growth hormone has been pumped into the meat and how badly treated the intensive farming has been to get the cheap chicken or beef. Look to your conscience - small local people or faceless multinational. I try to shop local for as much as I can on fruit, veg and meat - soap powder, butter, tinned good - supermarkets are ok. For fresh good quality fish & meat - my local butcher and fishmongers do it so much better and although a little more you do get quality.
Andy Rouse, St Annes, UK

The supermarkets have all been killing the independent shop for a long time, Tesco are not the only ones to blame. At the moment they are doing a better job than the other supermarkets, but that won't last for ever. The others will simply copy Tesco and take some of their trade, it happens all the time.
Chris, UK

It isn't just Tesco, although they are the biggest and hence worst offender in power terms. We need more help for smaller firms to give them a level playing field. The laws on planning in particular allow the big and powerful to push out smaller competitors. Sliding scale taxes would help even out things financially. Think about the diversity and choice we see in countries like France and Italy - that would benefit us all but the power of the supermarkets gives us little chance of seeing it
Eddy Reynolds, Worthing, UK

Tesco has been allowed to get to an unhealthy position
Gary, Peterborough, UK
Tesco has been allowed to get to an unhealthy position. They should not be allowed to branch out from groceries to other things such as insurance. Especially when you consider that Tesco's insurance is just a re-branded product, they don't manufacture the policy and they don't administer it, however then can afford to use their vast food profits to subsidise other areas of the business.
Gary, Peterborough, UK

I work in the food ingredient industry, and what frustrates me is how the major supermarkets like Tesco bully the food manufacturers in to paying for the best spot on their shelves. Why should the supermarket make the entire margin and the food manufacturers make nothing? Stores like Tesco should exercise caution in how they use their purchasing leverage as having suppliers who make no money is a false economy and is not sustainable.
Andrew, UK

I am a Tesco customer and find it first rate. Well done to them to generating so much business and doing so well. As for people that complain that this affects the local business, they can only blame themselves. People choose to shop at Tesco, nobody forces them to go there. Tescos - Keep up the good work!
Adam, Preston, Lancs

Tesco is taking over in terms of providing goods at lower costs, which undoubtedly creates the mass appeal. However, I personally place quality over cost, and good quality (particularly for fresh goods/meats) is something in my view Tesco lacks!
Matt, Leeds, UK

We all vote, within reason, with our wallets
Tom, Swindon, UK
We all vote, within reason, with our wallets. I shop at Sainsburys for food as the quality is better. However, I bought a sewing machine from Tesco's internet site with a 90 saving. I can't afford to give that amount of money away.
Tom, Swindon, UK

Regarding the convenience stores, I used to have an expensive, poorly-stocked, scruffy and understaffed One Stop Shop. It changed into a Tesco Express recently, and I now shop there regularly for small things - the range is better, the store is clean and well-stocked and there is enough staff - a massive improvement. Prices aside (which independents may never be able to match, and aren't always the consideration for local shopping anyway), corner shops need to work on the convenience and quality angle to keep up.
Neil Williams, UK

I'm in the lucky position of being able to choose from several major supermarkets within a couple of miles of my home. Some are better at some things (e.g. meat or veg) than others. My local Tesco comes out way ahead on electrical and household goods and cheap, serviceable clothing. It also has one of the broadest selections of wines I've seen in a supermarket. Sadly, though, the quality of Tesco's fresh meat and veg lets them down - so I got to Sainsburys for these, Morrisons for fish and Tesco for 'general' groceries. I know I'm lucky to have the choice - but Tesco really do seem to be improving in leaps and bounds in recent years.
Lesley Carol, North Shields, Tyne & Wear

Some trading and competitor issues need address, this is true. On balance, however, we should be proud of Tesco. To see the now-famous red and blue logo popping up in far-flung corners of the world is as patriotically reassuring as passing a red GPO phone kiosk in the tropics. Especially surreal is the rapid expansion of Tesco in the Czech Republic. This is a country still emerging from former Soviet control where just half a generation ago people often queued before empty shelves. The mere concept of Tesco's presence then, and certainly there, would have been wholly unthinkable.
Patrick V. Staton, Guildford, UK

They are the most popular for a very simple reason - they are the best
David Nicoll, Daventry, UK
Whilst Tesco continues to supply me with what I want, where I want, how I want, and continues to treat me well - then I will carry on using them. As soon as someone else offers me a better value proposition, I will go elsewhere. At the moment they are the most popular for a very simple reason - they are the best. Once they cease to be, customers will leave them. Simple.
David Nicoll, Daventry, UK

I rarely go to Tesco as I do 90% of my weekly shopping in my village because I want to support them. I also buy Fair Trade, even though it costs more. Supermarkets may be cheap for the consumer, but think how little the supplier must get from it.
Gids, Durham, UK

I refuse to shop at Tesco any more. The food is sub-standard and whenever I used to go the shelves were always empty. I now visit my local farm shop regularly for fresh meat and veg. The products taste like fresh food should and is much cheaper.
Elaine Green, Littlehampton

No. In this free market there will inevitably be winners and losers. Tesco is benefiting at the moment because it is very price competitive. We seem to be unsure of what we want when we think that one company is unhealthily dominating the market yet at the same time want low prices.
Zak Kahn, Glasgow, Scotland

The supermarkets in general are far too powerful. Far from being driven by consumer choice they dictate to us simply by controlling the supply and by undercutting the small retailers. I now do as much shopping as I can from the local farmers' market and small retailers, however I am fortunate enough to have sufficient money to pay the higher prices that this sometimes entails.
Kate, Exeter

These chain store monsters are destroying the character and culture of our high streets
James, London
These chain store monsters are destroying the character and culture of our high streets and should be boycotted. Who wants a monoculture where every part of the country has exactly the same shops? Money spent in local small businesses actually goes back into the local community for the good of everyone. Money spent at Tesco benefits only their executives.
James, London

Yes - What people don't realise is that when Tesco has squeezed out all of the other competition it will be in a near monopoly situation and will be able to up its prices accordingly with there being little or no risk of shoppers going elsewhere as there won't be an elsewhere. This is a very worrying trend.
Andrew, Woking, Surrey

If you want choice you have to take the rough with the smooth. You have cheap prices at the cost of local corner shops
Bumble, Dartford, UK

I used to shop with Tesco online, and they were always efficient, on time and helpful. Now each time I place an order, it invariably is late, goods are missing, and it is impossible to get a straight answer from their helpline. It seems they have expanded their market but their quality has long since disappeared.
Alan, Southampton, UK

Well done to Tesco, they are a successful company making the most out of its takings and creating more jobs into the bargain, any business looks to grow, whatever their size so good luck to them. I shop there and will continue to do so.
Adam, Birmingham, UK

Corner shops unfortunately, must face the cold fact that they are a thing of the past
Alan Glenister, Bushey UK
Is Tesco taking over? They are but only because of the demand of the general public who want value for money and a store where they can afford to shop, especially shoppers with families. My wife and I shop at Tesco not only because of value for money but also for convenience; we can get all our main shopping in a Tesco Hypermarket without having to traipse around high streets. Parking is convenient and free. I could go on about the benefits which millions of the British public enjoy. Independent and corner shops unfortunately, must face the cold fact that they are a thing of the past. If other supermarkets are to make a come back they will have to compete with Tesco which can only mean another advantage to shoppers -Long may Tesco trade!
Alan Glenister, Bushey UK

Well, if it helps prevent it from being eaten up by an American Multi-National than I approve of its success and long may it continue. However, due to the dying out of local/specialist shops as a result of its spread, I feel that greater attention needs to be paid to the impact it has on our workforce and society as a whole. Those great profits are generated due to an army of people working on half the national average wage. Doesn't seem quite right to me.
Matt, Chelmsford, UK

I do shop at Tesco. I also shop in Sainsburys and Waitrose too. However, I try to use local shops; butchers, bakers, greengrocers etc as much as possible. I think that the position Tesco is in nowadays is unhealthy for choice and too much dominance of the market will eventually lead to less variety and a decline in quality for the consumer.
Carole, Bristol, UK

I shop at Tescos for convenience. I keep meaning to use the local fruit and veg shops more often as they are a lot cheaper and you get good quality food with no plastic packaging.
Steve, London, UK

The move to buy up local convenience stores should have been thrown out under competition laws
Paul, York, UK
I won't shop at Tesco anymore, due to its unhealthy dominance of the market and environmental impact. I think the move to buy up local convenience stores should have been thrown out under competition laws. At present some of these stores offer better prices than supermarkets. This provides unwelcome competition since people like me can use local shops for all their shopping; if we let Tesco take over they will increase prices to ensure these stores are only used for convenience purchases.
Paul, York, UK

If Tesco can undercut most other shops and provide value for money, which they do, then who cares? I will not pay more for the same item at another shop and neither will anyone with sense.
Darren Drummond, Whitburn, West Lothian

It is the consumer who has put Tesco ahead in the supermarket stakes. If we decide Tesco is better value, so be it.
Amanda, Nottingham




SEE ALSO:
Record Christmas sales at Tesco
18 Jan 05 |  Business
Tesco 'to open non-food outlet'
16 Jan 05 |  Business
Festive sales 'worst in 10 years'
11 Jan 05 |  Business
Tesco battling Asda in price war
21 Dec 04 |  Business



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