Critics say Tesco is acting as a “manipulative monopoly”

Critics say Tesco is acting as a “manipulative monopoly”

Tesco has this week been accused of employing “suspect tactics” to force through construction projects as it looks to build on its already expansive empire in the UK.

Yesterday (1 September) it was alleged that the retailer bought a town centre shopping precinct through a front company, allowed it to become derelict, then used the poor state of the shopping centre in Linwood, Renfrewshire to win council backing for a new Tesco shopping complex.

Critics say the UK’s richest retailer is acting as a “manipulative monopoly” through its vast wealth and ownership of a massive bank of development sites, and rushing through building programmes ahead of the introduction of controls that would severely limit its expansion.

UK pressure group Tescopoly told just-food that Tesco’s aggressive expansion has been “disastrous” for local shops and small businesses.

“[Tesco] already controls a third of the UK’s grocery market but is using increasingly dodgy tactics to gain further market share – such as front companies to buy land and using bogus figures to support planning applications,” said Helen Rimmer, Tescopoly spokesperson and Friends of the Earth food campaigner.

“The government must introduce tough measures to curb supermarket expansion and support a more diverse grocery market, including a ‘competition test’ to stop Tesco opening stores where they are already dominant,” Rimmer insisted.

Tesco however, remains confident that its plans for Renfrewshire will not only bring a new store to the area, but jobs for the long term unemployed.

“Linwood town centre has been in decline for years, before our involvement, or the involvement of Balmore, and it is our plans that will reverse this and bring investment back to the area,” a spokesperson for Tesco said.
 
"Our carefully considered plans were put to local people at the earliest opportunity. The scheme has local support and been granted planning permission on its obvious merits,” the firm added.

In December last year, following a review of competition in the UK grocery retail sector, the country's Competition Commission proposed that local authorities impose a ‘competition test’ when considering applications for new store openings and store extensions.

The move has been fiercely opposed by Tesco, and while the test is yet to come into effect, it is currently under consideration by regulators.

The test is designed to help “bring in competition where it is lacking” and to “stop individual retailers consolidating strong positions in local areas to the detriment of consumers”.

A modification in October last year, allows retailers to make "small extensions" of up to 300 sq metres per store - if the outlet has not been expanded in the previous five years.

According to The Times, Tesco lodged "nearly double" the number of planning applications as its two largest rivals combined last year, while Asda and Sainsbury's - the country's second- and third-largest chains - had a combined total of 45 outstanding planning applications.

But it’s not just in Britain that Tesco is facing opposition to its aggressive expansion plans.

In June, the retailer was refused planning permission to build a store at the edge of Ballyclare in Northern Ireland.

The Planning Service for Northern Ireland told just-food that it recommended the application for the store be refused.

And the Northern Ireland Independent Retail Trade Association and Ballyclare Chamber of Trade both welcomed the decision to reject the proposed out of town store.

The refusal was a second blow to Tesco's ambitions in Northern Ireland after proposals to build a store close to Banbridge were also blocked.

The ambitious retailer is unlikely to see this as a setback. Nonetheless, whatever Tesco decides on next, the retail giant can be certain that any move it makes is sure to be scrutinised.