Tesco chain looms larger over Irish shops

Supermarket giant’s expansion threatens small businesses and damages communities

» BY MARK MOLONEY

Tesco has grown to dominate the retail sector in Britain

DUBLIN CITY COUNCIL has unanimoustly voted for a motion put forward by Sinn Féin Councillor Anthony Connaghan calling on the City Manager to think long and hard about the consequences for local enterprises, jobs and consumers on applications by large supermarket chains such as Tesco for new stores.

The motion came after An Bord Pleanála overturned Dublin councillors’ refusal for the development of a Tesco Express store and off-licence at Cardiffsbridge Road in Finglas. Residents and business figures feared that the premises would negatively affect already-established local shops and employment, and increase traffic and anti-social behaviour. Although the Sinn Féin councillor’s motion was proposed in June, City Council bureaucracy meant that it was only passed in December, well after the store had already opened.

Speaking to An Phoblacht, Councillor Connaghan said:

“Local people were initially not aware that an off-licence was going into the store or that it was Tesco that was applying for permission to open an outlet; this only came to light after the time to oppose the development had passed.”

 ‘Tesco Towns’ – where massive hypermarkets dominate the local retail sector, stifling competition and forcing local and family-run enterprises out of business

This rather strange application process, whereby the company seems to attempt to conceal their plans to open outlets has not gone unnoticed by the courts. In January of last year, an application by Tesco Ireland to operate an off-licence in Dublin’s Temple Bar tourist quarter was rejected by a district judge.While planning permission for the store was granted, the application which would have seen the store run an off-licence was rejected on the basis of the retailer’s character. The judge went on to criticise the way the company dealt with the applications. saying that the manner in which Tesco have applied in the past “is of grave concern”.

Many critics have cited the growth of the supermarket chain in Britain where it is believed — through a combination of its supermarket, grocery stores and other outlets — it holds almost 33% of the market share. This has led to the creation of what are dubbed ‘Tesco Towns’ where massive hypermarkets dominate the local retail sector, stifling competition and forcing local and family-run enterprises out of business.

Councillor Connaghan says that, since the opening of the Cardiffsbridge store, local retailers have been under huge pressure:

“A lot of the residents contacted me straight away when they found it was Tesco because the local shop next-door has been here 20 years and it has looked after the community. Shoppers don’t want to see them under. There are people who think the Tesco is great but we have to look beyond the short-term benefits to the long-term effects on our communities. Statistics show that when big supermarket chains go into an area, for every job they create, one-and-a-half jobs are lost. If you have a load of small and independent retailers, they are all using couriers, delivery vans and suppliers, but if you have one massive supermarket it cuts all that out.

“Just months after Tesco went into Finglas, one local shop had to shut down – it just could not compete. The other one has also been under huge pressure. The off-licence has led to a lot more anti-social behaviour. Local residents have contacted me saying that gangs of young people are going in and buying alcohol and then going outside to drink it at the side of the shops or over by the church.”

In some parts of Britain, Tesco has been accused of abusing its monopoly position to exploit small farmers and suppliers while its use of below-cost alcohol pricing and special offers in an attempt to get people through the doors have been widely criticised.

 A leaked Tesco internal memo showed that the retailer had attempted to hide from Irish customers the fact that it was buying from British suppliers, displacing local produce with imports

The reality of the threat to small Irish suppliers was highlighted by a leaked Tesco internal memo, published in 2009, which showed that the retailer had attempted to hide from Irish customers the fact that it was buying from British suppliers, displacing local produce with imports. The Irish Farmers’ Association responded by saying this practice “will inevitably lead to thousands of job losses and will put Irish producers of local, fresh produce out of business”.

Residents and communities in Smithfield in Dublin and Thurles, County Tipperary, are campaigning to stop branches of the supermarket giant from opening in their own areas. Last June, Cavan County Council, despite opposition from Sinn Féin, decided to go ahead and sell off more than five acres of land at Townparks and Tullymongan to Tesco. Cavan Chamber of Commerce said: “If Tesco goes ahead with its planned superstore, as proposed, it will have a detrimental effect on our town.”

Back in Finglas in Dublin, Councillor Connaghan has also written to the City Manager asking how the council could reject plans for such an outlet but An Bord Pleanála could give the go-ahead. As An Phoblacht goes to print, the City Manager has not replied to the request for an explanation.