Chains Are Taking Over Britain, Survey Finds

Date: 8 Jun 2005 | posted in: Retail | 0 Facebooktwitterredditmail

More than 40 percent of the towns surveyed for a new report by the London-based New Economics Foundation are so overrun by chain stores that they have lost their local identity and become little more than “clone towns.”

“We are reaching a critical juncture,” NEF’s report contends. “We can choose to take action that will lead to thriving, diverse, resilient local economies across the UK; or, we can do nothing and condemn ourselves to bland identikit towns dominated by a few retail behemoths.”

The report offers more than a dozen detailed recommendations for curtailing the market dominance of global retailers and rebuilding local enterprise.

NEF is an independent nonprofit organization that advocates for an economic system that puts people and the planet first.

Increasingly alarmed by both the growth of superstores on the edge of town and the proliferation of chain stores in city centers, NEF launched a nationwide survey last year to document the decline of independent businesses. It was carried out by volunteers and published as the Clone Town Britain Survey on June 6.

Of the 103 towns surveyed, 34 percent had sufficient numbers of locally owned businesses to qualify as “home towns”; 41 percent had so few independent stores that they were tagged as “clone towns”; and the rest, 26 percent, were somewhere in between. All of the towns studied had populations of between 5,000 and 150,000 people.

Twenty-seven neighborhood business districts in London were also surveyed. The results were similar: 33 percent had mostly local stores; 48 percent had mostly chains; and 19 percent were borderline.

Interestingly, the survey also found that “home towns” provided a significantly broader range of goods and services than “clone towns.” Clone towns on average had only 15 different types of shops and tended to be dominated by certain categories, such as apparel. Home towns averaged nearly 18 types of stores and generally had more retailers selling food, hardware, and other everyday goods.

US-based chains, such as The Gap and Borders Books, now line many British high streets. Starbucks has outlets everywhere, including more than 220 in London alone. Wal-Mart, which owns the British supermarket chain Asda, derives more than ten percent of its revenue from the UK and ranks as the country’s second largest retailer.

British chains, such as Boots and Next, have also expanded dramatically over the last few years. Particularly significant has been the growth of the top four supermarket chains (Tesco, Wal-Mart/Asda, Sainsbury, and Safeway), which not only dominate spending at out-of-town superstores, but are also invading town centers by opening convenience stores, such as Tesco Express and Sainsbury’s Local, along high streets. As a consequence, more than 2,100 independent corner stores closed last year, on top of a loss of more than 300 the year before.

NEF believes the decline of independent retailers may soon reach a tipping point, beyond which recovery will be difficult, but contends that the country is not there yet: “There is still time for action to protect our home towns, to prevent our border towns becoming clone towns, and to begin to reverse the trend in the towns that have already been overtaken by the clones.”

The report outlines several strategies for turning the tide, such as:

    • Require new retail developments to reserve a certain portion of their space for locally owned businesses.

 

  • Restrict changes of use for retail stores that provide essential neighborhood services (to limit the displacement of, for example, local food stores by upscale apparel chains).

 

 

  • Establish an independent watchdog that would allow farmers and other suppliers to report abuses of market power by the major supermarket chains in confidence. (A Code of Conduct established by the Office of Fair Trade in 2002 to prevent the big chains from exploiting suppliers has failed due to the fact that they are reluctant to report abuses for fear of reprisals from their top customers.)

 

 

  • Cap the market share of a single retailer to no more than eight percent in any one category. Such a rule would require the top four grocery chains to divest some of their stores.

 

 

  • Launch Community Land Trusts to reserve property at reasonable rates for locally owned, community-serving businesses.

 

 

  • Establish a lower tax rate for independent retailers located in town centers.

 

 

  • Require governments to analyze local money flows in making procurement and planning decisions.

 

 

  • Expand NEF’s BizFizz program, which has placed a business coach providing free support to start-up entrepreneurs in a dozen communities.

 

 

  • Follow the lead of US cities and towns in capping the size of retail stores, requiring economic and community impact reviews, and restricting the proliferation of formula businesses.

 

 

  • Enact the Local Communities Sustainability Bill, which would give communities greater power and resources to shape their own futures.

 

 

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance, and directs its Independent Business Initiative, which partners with a wide range of allies to implement policies that counter concentrated power and strengthen local economies.