What can be done to preserve access to groceries for those affected by
food deserts?
CONTENTS OF THIS PAGE
1)
Specialisation or diversification
1.1) Specialisation
of small shops
1.2) Diversification
by small shops
1.3) Interaction
between different retail premises
1.4) Loyalty cards schemes
1.5) Buying groups
1.6) Support from
wholesalers
2)
Small shops, deliveries, and Internet orders
2.1) What goods can
be bought on the Internet
2.2) Possible
problems with grocery purchases on the Internet
2.3) Who purchases
on the Internet / uses remote delivery services
2.4) Small shops and
Internet grocery orders
3)
Subsidising the rent of small shops
4)
Subsidies and grants for local shops
4.1) Why (small
businesses) may not get subsidies
4.2) A wide array
of grants available
4.3) Problems with
grants, moral hazard
4.4) Suggestions
for other financial help for small shops, problems with these
5)
Farmers markets
6)
Local buyouts of grocery stores
6.1) Community
owned stores
7) Local activism, local co-operation
7.1) Saxmundham
1.
Specialisation or diversification
1.1.
Specialisation of small shops
Rural shops in affluent areas can specialise in an upmarket
range of goods; for example, cheese, wines, or locally-made crafts goods.
Smaller grocery shops have the advantage of flexibility of stock compared to
the inertia of a large supermarket, and can stock unusual foods such as
multicoloured pasta, a different such food each week to maintain custom. The shop gains tourist trade, and also draws
custom from a wide radius of neighbouring villages. Profits from this support the shop, enabling
it to maintain a range of general groceries. Of course, not every village can have such a
specialist shop.
Examples of non-food shops successfully specialising include
a video shop in Memphis, Tennessee, which stocked a wider range of films than
the local Blockbuster, and expected staff to spend several hours a day watching
the videos so they could advise customers on them. A local independent building supplies shop in
the USA stocked not only power tools but the spare parts for them, unlike the
major chains. Independent clothes shops
can specialise in clothing for the very tall, large, or small persons.
Independent shops generally can specialise in product training, because
customers at chain retailers may obtain their cheaper prices at the cost of
lack of available advice on products.
Specialisation can work in less affluent areas. On The Beechway, Ashby, Scunthorpe, there is a
fishing tackle shop that draws in custom from a wide area of Lincolnshire and
Yorkshire. North Lincolnshire has many canals, rivers, and dykes, and is quite
a centre for recreational fishing. This
shop on The Beechway also brings trade to the other shops on the parade,
enabling them to stay open and offer grocery items.
Small grocery shops can specialise in ethnic-minority foods
if there is a local market for this. The supermarkets have already entered many
ethnic-food markets, for example Indian, Chinese, Italian, and Thai, to an
extent. However the specialised spices and other ingredients for home cooking
of authentic ethnic dishes, as opposed to ‘ready meals’ in an ethnic style, is
not always found in a large supermarket. There are also smaller ethnic-food
markets such as Greek, Jewish, and Vietnamese, where there are insufficient
economies of scale and insufficient development of ready meals for English
consumers for the supermarkets to consider penetration, as yet anyway.
1.2)
Diversification by small shops
Diversification is the route followed by many small
convenience stores. Space once used for
food retailing has been given over to photocopying, newspapers and magazines,
telephone cards, cash point machines, lottery and electricity payment machines,
dry cleaning services, and much else. Some
convenience stores gained extra space by expanding into an empty unit next
door. The danger is that every local
convenience shop will do this and one shop’s gains will be at the expense of
another. Worse, a local price war may result, reducing profits for all. Some shopkeepers, although reluctant to
co-operate with a competitor, will try and avoid such price wars.
1.3)
Interaction between different retail premises
Specialist shopkeepers often welcomed the presence of a
different type of specialist shop close by, as this would increase footfall to
their shop. Some types of retailers were
less welcome as neighbours. Off licences
were feared for possibly generating rowdiness and vandalism, and takeaways for
generating litter. Both these types of
shops were seen by shops opening regular hours as doing little to help their
business because they opened at different hours, later in the evening. Convenience stores were less tolerant of any
neighbouring retail facility. A
convenience store in east Birmingham welcomed the closure of the chemist next
door, as this meant more parking spaces for customers coming to him. A convenience store in Lincolnshire looked
forward to the closure of a garden centre opposite because housing would be
built there, hopefully bringing him more custom.
1.4.
Loyalty cards schemes
Some groups of shops have started loyalty card schemes, copying the loyalty card schemes in operation at e.g. Tesco. Customers gain points for using one of the participating retail outlets. Leominster in Herefordshire is trying this scheme.
Pay Point, the company which operates pay terminals in
17,500 small shops, is pioneering another scheme using customers’ mobile phones
(Daily Mail, 13 April 2007, p.41). Some
shoppers see coupons as outdated and inconvenient; this scheme will see a
barcode sent to participants’ phones, and they will be able to get this barcode
scanned at the shop till to receive loyalty rewards.
1.5. Buying
groups
Buying groups, or affinity groups, were first set up in 1955
in the UK to defend small grocers against the multiples. By the 1970s about 21,000 of the UK’s 57,000
convenience stores had organised themselves into buying groups such as Wavy Line,
Spar, Mace, and VG. Convenience stores
in this 21,000 were less likely to close than others (J Tanburn, 1981, p.22). Buying groups provided some of the economies
of scale enjoyed by supermarkets for small shops too. However some small shopkeepers resented the
loss of commercial autonomy they felt went with joining a buying group. Member shops had to keep up certain standards
of cleanliness because the name itself became a brand with the public and one
unkempt shop might spoil opinion of all the others. Some buying groups required their members to
become off-licences. This would raise
turnover and profits but the shop would then by law have to stay open till
10pm, raising the crime risk to shop staff. Applying for permission could also be costly for
the shopkeeper, especially if local people objected because of fears of noise
and crime. The 2003 Licensing Act will
permit off-licences to trade for 24 hours (The Grocer, 26/7/03, p.34). This will favour supermarkets, which may be
open for 24 hours anyway, but will increase pressure on small shops to open for
those hours or lose trade.
1.6.
Support from wholesalers
Wholesalers might give support to their small-shop
clientele, recognising that their business depends on them. Giving discounts to
shops who ordered in bulk presented a dilemma. If the wholesalers gave
discounts, this might encourage concentration of small shops, increasing the
small shops’ buying power over wholesalers. On the other hand not giving
discounts did not encourage customer loyalty. A clientele of fewer customers
with large orders encouraged buying power but also simplified the wholesalers’
business. Many wholesalers gave small discounts for bulk, of 5% to 10%.
Wholesalers gave other support to small shops. Some offered
a makeover of the shop, rearranging merchandise (both to increase sales and to
improve security). Wholesalers might arrange advertising free to the shop such
as neighbourhood leafleting or posters for the shop’s windows.
2.
Small shops, deliveries, and Internet orders
2.1.
What goods can be bought on the Internet
The Internet, as used for commerce rather than for
information-seeking, has made perhaps rather less progress in the area of
groceries than it has in, say, books, travel plans, financial schemes, or music.
The Web is best suited for commerce in
low weight, or even zero-weight, standardised, non-perishable, goods; ideally,
goods with a high value-to-weight ratio. These characteristics make them easy
to order, cheap to deliver, and immune to long delays at the delivery end
before the purchaser picks the goods up. Groceries have virtually none of these
characteristics, and it has been estimated that even by 2005 just 7% of the UK
grocery market will be transacted via the Web. Clothes, with their great variation in colour,
texture, pattern, size, and quality, may also be less suited to sales via
websites that may not give true indications of colour etc.
‘Groceries’ that are bought via the Web tend to be standard
items like toilet paper or mineral water. Mineral water is hardly a ‘high
value-to-weight product, or a low weight product, but the strategy for ordering
groceries from supermarkets appears to be for many shoppers to order the
standardised items from there, but still visit for items such as fresh vegetables.
If the supermarket is perceived to be
charging the same delivery cost (often £5, though perhaps nothing if from
Iceland or if over, say, £100 of groceries are ordered) no matter what is
ordered, the shopper may as well get the heavy items delivered and just carry
lighter items themselves. Shoppers using
the Web may still like to visit the shop physically, to examine fresh produce
for freshness, quality, and other characteristics, and to see what new products
or bargains are on offer.
2.2. Possible
problems with grocery purchases on the Internet
Those relying solely on the Web for grocery purchases are
vulnerable to erratic substitutions for goods they have ordered but are not in
stock, single deliveries of ‘two-for-one’ offers which they would have taken
two if physically present, and missing out on cheaper, better value substitutes
they may have taken if actually at the shop. Earlier problems with computers crashing
part-way through an order, uncertainty as to what had been ordered or whether
an order had actually been placed, and payment-security problems, are being
sorted out. However large supermarkets
may stock 30,000 different lines and sorting through a catalogue online may be
very slow. Pictures of the goods on
offer – all goods, not just groceries -
could persuade shoppers to buy more, but pictures take large amounts of
data compared to text, so can make sites slow to download.
Shoppers might find they were missing out on bargains – they
certainly would not benefit from the discount shelf many supermarkets have for
goods that are about to date-expire, always a busy place in supermarkets. Worse, if there was a BOGOF
(Buy-one-get-one-free) offer on, and the shopper would almost certainly have
picked up two items, if they ordered one of these on the Net, only one would be
delivered.
Some shoppers were worried about payment security, of giving
their credit card details over the Net. Although
sites have security measures, and shoppers would often be giving such details
at the store, people instinctively felt less secure about such transactions at
their home computer.
The last stage of Web shopping; delivering the goods, has
proved to be the major bugbear. The
retailer can use their own fleet of vehicles, or attempt to use an existing
delivery network such as the Royal Mail or the milk delivery vehicles. Either way, the logistical problem of having
the goods arrive in a reasonably short time and with a reasonably predictable
time slot of delivery, remains. Popular
delivery slots such as early evening when the shopper is home from work would
go quickly. Customers don’t want to wait
days for delivery, and then be told they must be in all afternoon to receive
the goods. Devices such as lockable
boxes attached to the outside of a property may partially solve the second
problem. However they are not suitable
for all properties, e.g. flats, they are unsightly, and still are not 100%
secure.
For supermarkets, there were problems of delivering frozen,
chilled, and ambient (room-temperature) goods all on the same van, and of
frozen goods left for collection thawing out.
2.3. Who
purchases on the Internet / uses remote delivery services
In theory the Internet could be a boon for those of limited
mobility who find it hard to physically access a good quality grocery store. In practice, ownership of computers, access to
the Internet, and the expertise to operate a computer, tends to be limited
amongst those who may suffer limited access to larger stores; that is, the
elderly, poor, and disabled. These
people, likely to live in small households and order limited amounts of
groceries at a time, get hurt most by the delivery charge put on small orders
by many store operators. Those ordering
via the Web tend to be cash-rich, time-poor households; the Web seems to be
mainly a time-saver rather than an access-facilitator. Better-off career women, who are also bringing
up a family, find that ordering from a supermarket via the Internet avoids the
risk of ‘pester-power’; the children cannot demand from the array of sweets
often found at supermarket checkouts.
2.4.
Small shops and Internet grocery orders
This is where small shops could play an important role. Most urban households are still within 500
metres of some kind of retail facility, albeit not one selling much fresh fruit
and vegetables. Rural households with
cars will likely have a shop within 5 – 10 minutes drive. Small shops might be able to hold goods
delivered, for example, when the householder is at work, for picking up later. This has some advantages and some drawbacks,
for the small shopkeeper. The customer,
when coming to pick up the goods, may well make some purchase in the shop also.
The shop could charge for holding the
goods, or simply rely on extra purchases generated. However shops could face problems with finding
space for Web-ordered goods hanging around on the premises for hours; many
small shops need to find a sales use for every last square inch of their
premises to remain profitable. At the
same time, some types of goods are demanding more space. The number of different types of chocolate
bars, for example, has multiplied over the past few years, and shopkeepers have
to stock them all, as if the one they don’t stock is a customer’s favourite,
that customer will take their whole trade elsewhere. There would also be a crime risk. Would the
shopkeeper be liable if the goods were stolen, and if the householder opened
the packaging to find damaged goods, would the shopkeeper be able to prove the
damage was not incurred at their premises? There may also be hygiene issues; butchers in
particular may be less enthusiastic about having packages hanging around near
meat. Which entrance would the deliverer
of the goods to the shop use? If it was
the customer entrance, the sales area of the shop would become congested,
presenting a trip hazard to customers. If
it was the back deliveries area of the shop, congestion and damage to the goods
may result.
However, as congestion on UK roads becomes worse, delivery
times perhaps become less reliable, fuel costs rise, and people become more
time-pressed, small shops might be able to play a role, as the ‘last-mile’
deliverer. With many direct-to-home
delivery networks, whether of electronic goods, like cable TV, or of physical
goods, the ‘last mile’ to the customer’s home presents more problems than the
rest of the journey. Some shops might, for a fee, act as local hubs for
Web-ordered goods, either delivering themselves or having the customer come in.
Some small grocery shops do deliver for
local well-known customers who cannot get in to the shop themselves; minimising
delivery costs by combining it with a journey being done anyway such as home
after hours or to the wholesaler. Local
shops, with knowledge of their customers’ time needs, may be able to have a
‘man and a van’ serving the last mile of such Web-ordered goods.
Local takeaways that also deliver anyway could also deliver
Internet goods, as Domino’s Pizza is doing already (Guardian II, 22/6/03, p.6).
This works well with lightweight goods
such as CDs. Some late-night garages, as
well as off-licences that are also open till late anyway, are holding
Web-ordered goods for a charge of £1 a package. Even hospitals, which are also of course open
24 hours a day, have been proposed as pick up points for Web-ordered goods.
3.
Subsidising the rent of small shops
Could landlords of retail premises reduce the rent? This would not help village shops which are
often owner-occupied anyway, but might seem preferable, to private landlords of
urban parades, to seeing units stay empty with no rent. However private landlords are reluctant to
give an outright rent reduction as this reduces the effective capital value of
their property. With several units, some
occupied, a private landlord may prefer to sit it out with the empty ones till
a tenant comes along. Or they may give ‘hidden’ rent reductions such as rents
holidays, whilst still maintaining the nominal annual rent as before. If councils gave rent reductions, this could
worsen the retail access problem in neighbourhoods with privately rented
parades because shops would migrate to the cheaper rents of the council parade.
In practice, rents for suburban shops
tend to be at the borderlines of profitability for the landlord, private or
council, given administration and repair costs. Councils, already short of money in most
cases, might be reluctant to cut their income further.
4.
Subsidies and grants for local shops
4.1. Why
(small businesses) may not get subsidies
Subsidies for particular
businesses are generally discouraged by both Westminster and Brussels. The prevailing ethos is of a ‘level playing
field’ where all businesses can compete on an equal footing. Of course one might argue that, to take the
sporting analogy a bit further, on a real playing field, with players of
differing size, aptitude, and ability, some would need to be handicapped,
others given a points advantage, for a truly fair game to take place. On a level playing field where all compete
together, the biggest players, for example the supermarkets, will always have
an advantage over the small corner shop.
Where, however, there is a perceived economic necessity for
a grant to a specific business, this will be made. This tends to mean, where a business is so important
to the local economy that it should not be allowed to cease production – for
example the car plant at Longbridge, south Birmingham. Smaller businesses may then perceive a
government bias towards help with the larger businesses.
4.2. A
wide array of grants available
A number of grants are available for small shopkeepers,
mainly for purposes like smartening up the shop front or for one-off costs like
buying new freezers, purchasing anti crime items such as security lights, steel
shutters, or alarms, or replacing imperial weighing equipment with metric.
There is generally a wide and ever-changing array of
grants for shopkeepers to choose from, each for a quite specific purpose.
This can be good and bad. A wide choice
means if the shop is unsuccessful at applying for one grant it can apply for
another. However the unstable and
variable nature of grants is confusing, means more paperwork and reading for
shopkeepers, and by the time a grant is applied for, it may no longer exist. Grants for e.g. rural areas tended to be on a
‘one size fits all’ basis, yet what is appropriate for wealthy commuter
villages outside Harrogate may not be appropriate for poorer ex-mining villages
near Doncaster.
Shopkeepers felt the need to be better advised on what grants
were available and which they themselves would be eligible for. However shopkeepers tended to distrust
official advisors, and used informal sources of information such as family,
friends, and neighbourhood organisations more. There may be a need for local ‘grant shops’ in
some retail areas, especially in areas of many ethnic-minority shopkeepers.
Ongoing grants for things like wages or running costs are
generally not available. However shops in villages of under 3,000 persons
can get business rates reductions. The idea here is not so much commercial help
as maintaining the vitality of the village. Since village housing is occupied more by
wealthy persons nowadays, this grant, with this purpose, may be seen as rather
regressive. Perhaps similar grants could
be given to the last shop on a less-affluent suburban housing estate (see 4.4.
below).
4.3.
Problems with grants, moral hazard
A major moral hazard with grants is that the shopkeeper may
come to rely on these rather than try and run an efficient business. Yet often an ‘inefficient’, that is
commercially unprofitable, business, can still be socially vital for an area,
at least for those in the area of limited mobility. There is a grey area of costs where a business
of negative profitability nevertheless produces a positive return if its social
benefits are allowed for, and a positive return in financial terms if those
social benefits could be costed. For
example, having a local shop may reduce the need for some care costs. Often,
though, these costs and social benefits are not quantified, because to do so
would be a complex and costly exercise.
Bureaucracy is another problem with grants and subsidies.
There are administration costs, costs of checking up on cheating, and costs of
dealing with those who miss out on the grant and appeal. Also shops that are seen as relying on outside
help to survive may be seen as hopeless, ‘basket cases’, something society does
not really need.
Interestingly, many small business associations such
as Chambers of Trade, many of whose members may well be small shopkeepers, did
not want subsidies for small businesses. Shopkeepers, even if pessimistic about the
future of the sector as a whole, tended to be more hopeful about the future of
their particular business, and preferred lower general taxation to government
help and ‘interference’.
4.4.
Suggestions for other financial help for small shops, problems with these
The idea of reducing the business rates of a single shop in
a village of under 3,000 people could be extended to isolated shops on poor
housing estates, that is, treat the estate as a ‘village’. In theory there would be no competition issue;
however these estates often have several empty shop units as well. If one of these units was taken up, would the
first shop immediately lose its grant, as well as now facing competition too? There might have to be guaranteed continuity
of the grant for say two years, irrespective of what retail developments took
place, but that would be costly; otherwise the retail facilities on these
estates would be very unstable.
There could be a rates and/or rent ‘holiday’ for anyone
taking on a previously empty shop. However this would lead to ‘churning’ as
when the ‘holiday’ ended, shopkeepers would move to another empty shop.
The burden of taxation on retailers could be shifted from a
floor-area based measure to one based on profits. This would help smaller shops because large
retailers tend to make more profit per square metre of sales area. However a
profit-based tax would be harder to administer because floor area is set and
easy to measure whereas clever accounting can disguise much of the profits a
business makes.
Some have suggested earmarking, or hypothecating,
taxes to support small shops. Some of the petrol tax could be used for this, in
an effort to help the environment perhaps. The Treasury tends to resist
hypothecation of taxes, for three reasons. Firstly, the economic cycle tends to
result in the need for tax revenue for a particular purpose rising just as the
actual tax payable is falling. In this case the Treasury would find itself
subsidising the hypothecated tax with general tax money at the bottom of the
economic cycle, and probably taking some money out of the hypothecation
destination at times of economic boom. This
would destroy the hypothecation idea. Secondly, hypothecating taxes may reduce
the willingness of the public to pay taxes in some instances. Those who see no benefit to themselves in the
purpose the tax is hypothecated for may resist this tax. Thirdly, hypothecation reduces the discretion
of the Chancellor to use taxation as (s)he sees fit.
5.
Farmers markets
Farmers markets have grown rapidly in the UK. The first Farmers Market in Britain was set up in 1997, but by 2001 the UK had over 200 such markets, with a combined turnover in 2001 of £65 million (Guardian 11, 5/2/02, p.64). By 2006 the UK had 550 Farmers Markets, and even the giant Tesco was sending Regional Buyers to some of these markets to see if the supermarket chain could source some local foods from there (Guardian 16 September 2006, p.29).
Such markets can help the trade of local fixed shops rather
than compete with them, as local people and tourists visit the market. Existing
shops may put out stalls too. However the success of the market, and its impact
on local shops’ trade, depends a lot on pedestrian flows and car traffic. Brigg, Lincolnshire, set up a farmers market
in June 2000, and attracts between 1,500 and 2,000 extra visitors to Brigg. A survey by North Lincolnshire Council found
that 35 out of the 40 businesses who replied thought the market had boosted
their trade.
Barton, Lincolnshire, also began a farmers market in autumn
2001, but this was less successful and closed in September 2002. A poor
location was blamed, away from the main pedestrian flows, along with having the
market on a weekday when many were at work. Epworth, near Doncaster, also had a
farmers market but some shopkeepers there felt this was too successful
(Scunthorpe telegraph, 13/11/02, p.13). The stall operators and their customers
took all the car parking, making it harder for customers of the regular shops.
Some shopkeepers complained that the stalls took over many of the parking bays
from 6am.
These examples show that the micro-geography of pedestrian,
car, and lorry flows need to be considered at a very small scale, down to a few
metres, for a market to work well with the local shops.
References
H FESTING, ‘So you want to start a Farmers’ Market’, ‘Town
and Country Planning’, July 1998, pp.216-219.
6.
Local buyouts of grocery stores
In some wealthier villages, villagers, faced with the
closure of their local grocery store and no alternative for miles, have clubbed
together to raise funds to take it over and run it themselves. In Maiden Bradley, Dorset, the villagers
raised £21,000 from the UK government’s Countryside Agency, and 150 of the 240
adult inhabitants contributed sums from £5 to £500, to buy shares in the
village grocery store (Guardian 10/6/2002, p.24). Some villagers contributed by volunteering
labour to paint and refurbish the shop. It reopened with an upmarket selection
of home made bread and other locally produced foods, along with wine and
specialty teas. The shop is leased by
its owners, the village, and manages to make a good profit.
However this option may well not be open to inhabitants of
less well off villages
6.1.
Community owned stores
On some poorer estates, such as Longley in Sheffield, which
in 2000 had 30% unemployment, shops have been set up by local people. Employment was provided out of the shop’s
profits, and the shop enabled people to access fresh fruit and vegetables
without paying an 85p bus fare each way, a lot out of £50 a week Benefits.
7. Local
activism, local co-operation
7.1.
Saxmundham
Saxmundham is a small Suffolk market town, with a weekly
food market going back to9 the 13th century. With a population of around 4,000 it was a
typical target for Tesco to set up a medium-sized supermarket there, in 1997. However Saxmundham is very untypical in that,
to date (Daily Mail, 1/7/2006, pp.56-57), Tesco has been kept out.
Three factors appear to have contributed to the success of
the town in preserving a small-shop economy, free from the threat of closure a
Tesco supermarket would possibly bring. Although
Tesco can also justify an argument, the ‘clawback of trade’ principle, that a
supermarket can actually boost the footfall to local shops. The clawback factor seems to work if the
supermarket is close to the other shops, bringing people in past their front
doors, if the local economy is prosperous, supporting a diverse array of shops,
and if the small shops can diversify and complement, not compete, with the
supermarket, offering specialist foods Tesco doesn’t sell.
The three factors in Saxmundham were, firstly, the energy of one campaigner, Lady Cranbrook, in evaluating the local food economy and I galvanising other people and shops to get together and face Tesco. Secondly, the subsequent co-operation of all interested parties, such as shops, wholesalers, and farmers. Thirdly, a helpful attitude by local government, namely, Suffolk Coastal District Council. The Council for the Protection of Rural England also became involved and has published a report on Saxmundham. Local Saxmundham shops have continued to make a real effort to attract custom, with the spectre of Beccles down the road to spur them on; in Beccles, the local market ‘died the week Tesco opened, with only four stalls left operating there in 2006’. Local stores source food locally, pride themselves on the freshness of the produce, and give local services to those unable to access them easily, such as the elderly, disabled, and unwell.