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Extract: The Rise of the Supermarkets

by Josh Sutton
Jun 19, 2016
Josh Sutton's new book Food Worth Fighting For

The origins of the supermarket are steeped in social purpose. They emerged initially as co-operative societies formed among the working classes as a means of securing a supply of good quality food for their members. With obvious connections to, and sharing similarities with the ‘seditious’ benefit clubs of the eighteen century, the first co-operatives date from the 1760s. The objectives of the early pioneers were to buy up food wholesale and to sell at retail prices and to divide any dividend among members on an annual basis. In effect, the aim was to cut out the middle man.

By the middle of the nineteenth century, the number of co-operative societies had grown and members were able to buy tea, sugar, flour and other groceries under one roof. By 1914, the numbers of co-operative society members was in excess of three million, and the overall business had a turnover of one hundred million pounds. Despite the rise of the co-operative society, throughout the 1950s and 1960s, people also continued to shop locally, calling at greengrocers, fishmongers and butchers shops for their weekly supply of food. Retailers like J. Sainsbury, Tesco and William Morrison realised the commercial potential of the co-operative model, and in particular, the ‘one stop shop’. They were keen to get in on the act. They began to expand during the 1960s, floating their companies on the stock exchange, attracting shareholders rather than members. The era of self-service supermarket shopping was born. Rapid expansion during the 1970s and 1980s saw a sea change in the way modern families bought their food. Technology too, fed this expansion. The widespread availability of domestic freezers, which grew during the late 1960s and early 1970s, also marked a change in the types of food that modern families were buying, as well as the way they were cooking and eating.

The new supermarkets were able to stock large quantities of frozen food, and an ever increasing range of ‘ready meals’ which apparently suited the lifestyles of busy home cooks. Supermarkets brought with them the apparent benefit of saving time on the weekly shop, but perhaps more importantly, through their bulk buying power and its corresponding influence over the food chain, supermarkets were able to further drive the retail price down to suit the pockets of their customers. It’s a marketing technique that clearly worked. It is also a marketing technique which brings with it a number of dire consequences. According to the Office of National Statistics (ONS), food stores account for over 40% of total retail sales in the UK. The vast majority of spending takes place in what the ONS calls ’non-specialised food stores’, namely supermarkets. The top five retailers have around seventy five percent of market share in a groceries market worth a total of one hundred and forty six billion pounds. The ONS also describes an average weekly spend for a family of two adults with two children, of eighty two pounds and ninety pence. It is fair to say that the majority of our food is bought from supermarkets. This trend towards cheap is bolstered with the recent arrival of ‘price busting’ competitors Lidl and Aldi challenging the domination of the top flight supermarket stores. The broader impact of these new interlocutors has yet to be recognised, but it appears that supermarket bosses are committed to delivering low cost food to the market.

There is a school of thought, and Professor Tim Lang at City University London is arguably the head teacher of that school, that points out that the government’s adoption of a ‘cheap food policy’ dates back to the mid nineteenth century with the abolition of the Corn Laws. The repeal of the Corn Laws in 1846, a demand made by the emerging industrialists who wanted cheaper imported food for their low wage workforce, paved the way for the market alone to determine prices once more. The riot act of 1715 and the often brutal dealing with public disturbance around food markets had all but removed the public from any negotiation. More recently, since the early 1970s, Britain has enjoyed access to cheap food and that access has been facilitated by the rapid expansion of supermarket shopping. Consumers as well as producers however, have inadvertently become collateral damage in a never ending price war, a drive for higher profits and customer loyalty. Supermarkets continue to do battle in a bid to maintain the flow of customers through their doors, perpetuating a highly flawed market model that results in mountains of food waste that is detrimental to both producers, and ultimately the consumers themselves. Over production is the corner stone of the supermarket business model. It means that supermarket buyers are able to wield control over the prices they pay to producers, as well as slash their orders at a moments notice. All the while there is an abundance of produce out there, growers are more or less forced to dance to the tune of the supermarket jingle. I’ve worked in a supermarket and I know how annoying that can be. Through bombarding customers with two for one offers, offering cheaper prices and seemingly endless choice, the predominant paradigm has led to a reduction in the production of domestically produced food in this country. It is now often cheaper to import food from abroad, while farmers and producers find it increasingly difficult to make ends meet. Jay Rayner, in his book ‘A Greedy Man in a Hungry World’ examines the ‘supermarkets are evil/supermarkets are not evil’ paradox. It is of note that Mr Rayner dedicates a mere fourteen pages to the claim that supermarkets are not evil, and an additional ten pages to the chapter which suggests the opposite. Rayner illustrates well the effect of supermarkets’ buying power on the welfare of British farmers, citing the case of a plum grower whose entire crop was left to fall from the branches and rot as the supermarkets bought-in cheaper plums from abroad. The role of the consumer too must be taken into consideration in this price war. It is difficult to determine whether it is solely consumer demand or supermarkets’ capacity for squeezing margins (at the expense of producers and their own staff) which feeds the perpetual drive for cheap food. Common sense would seem to indicate that it’s a bit of both, but not necessarily in equal portions.

Supermarkets seem to hit the headlines on a regular basis these days, often under a cloud. In 2014, Tesco ran in to trouble on account of its over aggressive accounting practises as it was found to have over estimated its profits to the tune of £250m. If the market squares of towns and villages were the scene of food riots in previous centuries, it is almost impossible to envisage such taking place today. Beyond the odd scuffle in the reduced items section, it is difficult to imagine scenes of tumult and affray in a market place defined by isles and fridges packed with special offers and falling prices. There are of course exceptions here and there. More recently the falling price of milk has brought farmer and retailer to loggerheads. In August 2015 in a fitting protest by dairy farmers, and highly symbolic of the store’s origins, staff and customers at ASDA were surprised to witness a couple of cows being herded around the store in Stafford. Somewhat ironically, ASDA was born in the 1960s of a merger between a family of butchers and a group of dairy farmers originally seeking to protect themselves from falling prices of milk. The protest was part of a series of nationwide action taken by farmers to highlight the fact that some supermarkets refuse to guarantee a price for milk which covers its production. The protests appear to have had an effect as a number of supermarkets agreed to offer a higher price paid to the their milk suppliers.

But to a degree, the evil/not evil question is an arbitrary point, and to get into a debate as to whether supermarkets are good things or bad things is similar in its nature to the debate over the ‘morality’ of genetically modified crops, a case of ‘divide and rule’ if you like. It merely serves to divert attention from more pressing matters. Namely the devastating effect that some supermarkets can have on individual farmers and producers, not to mention the control they have over the food system as a whole. Somewhat ironically, supermarkets contribute daily to a growing mountain of food waste. The model of pile ‘em high and sell ‘em cheap is clearly not working as despite, or perhaps because of, all efforts to offer food at lowest prices to their customers, supermarkets are increasingly coming under the scrutiny of governments worldwide, with regard to the amount of food they throw out each day. Food waste is one of the points that the parliamentary inquiry in 2014 and the Hungry for Change reports appears to have picked up on and is currently the focus of much attention. To my mind, the fifteen million tonnes of food waste generated annually in Britain alone goes some considerable way to belittling the argument from the GM lobby of a need to increase crop yields. With fields and orchards full of perfectly good food left to rot it would appear that a case could be made to the effect that there is enough food to go round, and that it is access to that food which ought best be examined by government. I doubt very much that the waste generating food system we have at the moment will ever be used as a counter to the GM lobby, but it is increasingly attracting the attention of the British public. What I find interesting is the way in which supermarkets (and arguably the government), although perhaps slow to start off with, have suddenly realised that spread of food poverty in Britain presents a relatively low cost solution to the issue of what to do with the growing mountains of food waste. The only problem is that it is neither a solution in its own right, nor is it sustainable.

In 2013, the UK government set up a ‘watchdog’, the Groceries Code Adjudicator (GCA), in a bid to ensure that supermarkets treat their suppliers fairly and lawfully. Within a very short space of time, the GCA came under fire from the farmers it was set up to protect and is castigated as a watch dog without teeth as the powers of the adjudicator appear limited vis-à-vis the might of the supermarkets. It’s a dispute which could be seen to echo that of the Landed gentry and gentlemen farmers versus the industrialists back in the mid nineteenth century over the repeal of the Corn Laws. Once again, the industrialists (supermarkets in this case) appear to come out on top.

The financial pressures on supermarket bosses, and the need to satisfy shareholders rather than members has a marked effect on their practises. In order to ensure low prices for customers clearly overheads such as wage bills are also kept to a minimum. It’s not just supermarket employees however that appear to suffer as a consequence, but customers too. In 2013 a number of supermarkets ran into trouble as a lack of integrity in their supply chains was revealed amid the horsemeat scandal. Attempting to pass off cheaper horsemeat as beef is akin to adulteration and marks a return to the days of a handful of gravel in the sack of corn. We witness the compromise of price over quality. Unlike the co-operatives, which preceded them, supermarkets’ primary motives are geared around profits. That is not necessarily a bad thing in itself, but what is needed is an understanding of the broader effects such a model has on the food chain as a whole. To what extent, if any, does the dominance of supermarkets in our food system contribute to growth of food poverty in Britain? In the following chapter, we discover that a number of supermarkets are keen to establish their community credentials and contribute willingly to food banks and food recycling schemes with donations of waste food from their distribution centres, food that never even makes it onto the supermarket shelves.

Josh Sutton writes and illustrates a regular column in Camping Magazine, and has written features for; The Guardian newspaper, The Guardian Word of Mouth blog, The Yorkshire Post, Coast Magazine, STIR Magazine, 60 North Magazine, The Big Issue, Scotland Outdoors, amongst others.

You can buy his new book Food Worth Fighting For here

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