Break Up UK's Tesco, Says Think-Tank

08 June 2005

The UK's biggest retailer, supermarket giant Tesco, is damaging local communities.

Thus accuses left-leaning British thinktank, the New Economics Foundation, which says Tesco has "gone beyond the point where [it] has a sustainable market share" and should be broken up.

The company notched profits of over £2 billion ($3.64bn; €2.96bn) earlier this year, the first British retailer to reach that milestone. It spent around £55 million on advertising in 2004 and accounts for almost 30% of the nation's supermarket sector [WAMN: 07-Jun-05]. It is estimated that around two-thirds of the UK population visit a Tesco store at least once a month.

The NEF, which has links to the government's Treasury department, believes that competition authorities' decision to allow the supermarket leviathan to enter the convenience 'corner' store sector "had been an error of huge proportions".

NEF policy director Andrew Simms also accuses Tesco of "anti-competitive practices" which put pressure on smaller competitors and suppliers.

The onslaught came before the launch of a report by the NEF, claiming the UK is becoming a nation of "clone towns", where every high street is full of multiple retailers driving independent enterprises out of business.

Tesco begs to differ. Company spokesman John Church says: "There is still a lot of choice in the UK retail market. More than 90 per cent of the population have access to three supermarkets."

And the British Retail Consortium adds: "Big supermarkets and small independents offer different services, and both have valid positions on the high street."

The concern over Tesco's dominance echoes similar disquiet in the United States over the practices of the world's biggest retailer Wal-Mart.

Data sourced from Financial Times online; additional content by WARC staff