Ghost Towns; Rise of the Supermarkets Could Shut Down 20,000 Small Stores, MPs Told

Daily Mail (London), October 19, 2005 | Go to article overview
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Ghost Towns; Rise of the Supermarkets Could Shut Down 20,000 Small Stores, MPs Told


Byline: SEAN POULTER

FOUR out of ten small stores could be wiped out within a decade creating 'ghost towns' across Britain, it was claimed yesterday.

MPs were told Tesco, Sainsbury's, Asda and Morrisons are effectively putting small rivals out of business at an alarming rate.

Leaders of the UK's 50,000 convenience community stores said 2,000 are closing a year. If the trend continues, the number will drop by 40 per cent over the next ten years.

They warned the situation could be even worse if big stores win a trading free-for-all on Sundays. The claim came as MPs on the All-party Shops Group began investigating the effects of the major supermarkets' expansion, particularly the move to open or buy-up thousands of small stores.

David Rae, chief executive of the Association of Convenience Stores, said: 'In 2004, over 2000 convenience stores closed their doors. This will continue unless action is taken by Government and the Office of Fair Trading. If any community loses a shop it loses a vital part of its fabric.' He said the go-ahead for big supermarkets in or on the edge of towns has had a devastating effect. 'They leave a ghost town centre ... it kills the town centre,' he said.

Mr Rae pointed to research showing that if a third of shoppers desert the High Street in favour of an out-of-town supermarket, 'the High Street becomes unviable and will close'.

He added: 'People want and value their local shops - they are concerned about what is happening to them.' Mr Rae added that if the law restricting Sunday trading is removed, it will mean the closure of more small stores.

Tesco takes [pounds sterling]1 of every [pounds sterling]3 spent on groceries in the UK. It is opening small Express stores at the rate of more than one a week and is heading for a total of 1,000 within a year.

The supermarket industry is supposed to guarantee fair play to suppliers and rivals through a code of conduct policed by the Office of Fair Trading.

But John Murphy, of the Federation of Wholesale Distributors said the code is 'toothless'.

He said the future of small stores is 'bleak' without legal controls on big supermarkets.

Small store leaders are calling for a ban on supermarkets buying up any more community chains. They also want a law to stop them selling goods below cost price and details on how much the supermarkets pay their suppliers for products to be made public. Bob Russell, an MP on the committee, said the current system has all the hallmarks of a cartel. 'It looks like the Premier football league.

There are lots of teams but only four can win,' he added.

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