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Leigh Sparks is Professor of Retail Studies, Dean of Faculty of Management, University of Stirling, STIRLING FK9 4LA.

Research Paper 0002 ISSUES IN FOOD RETAILING IN SCOTLAND Leigh Sparks

Disclaimer The opinions expressed in this research paper are the responsibility of the authors alone.

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2 Issues in Food Retailing in Scotland

Food retailing and shopping are emotive subjects, possibly because they engage virtually everyone at some time. How and when we go food shopping has changed considerably over the years. Where we go and what we buy is also much altered. The nature of the experience is often very different to previous generations. Basic food shoppings relationship to other aspects of food purchase and consumption has changed as society and individual desires have altered. This shopping experience is constructed in many ways by retailers. At the organisational and store levels, food retailers have transformed the practice of food retailing and thus food shopping for example by changing our concepts of the experience from a corner shop to a hypermarket economy model (Dawson and Burt 1998). Retailer relationships with manufacturers and suppliers are radically altered to even a few years ago. The power of the food retailer in relation to both the manufacturer and the consumer has increased (Dobson and Waterson 1999). These changes have implications for consumers and for food consumption. Access and choice have become important issues at a number of levels, not least in connection with deprived neighbourhoods (Department of Health 1999).

This paper is intended as a discussion and issues paper. It has been written with the express aim of raising questions at a particular seminar - the Healthy Food Policy in Scotland seminar although it is hoped that it will be of broader interest. The invitation to prepare the paper asked that it focus explicitly on the retail issues of the healthy food and eating discussion and on the implications of retail change. It is overtly intended as a paper for debate rather than a paper providing conclusions. The paper contains five sections. First, a brief review of consumer change is presented. Secondly, a discussion of the food retail system is provided. Thirdly, these elements are combined in a brief analysis (albeit one with only partial data) of food retailing on the ground in Scotland. This is then extended, fourthly, into a consideration of shopping and retailing implications of these changes. Finally, a series of questions are posed about the future construction of food retailing and shopping.

Consumer Change Over the last 15 or so years, the Scottish consumer has been considered in a number of reports and studies (eg Dawson and Broadbridge 1988, Dawson 1994, Fernie and Woolven 1995). In all of these, it is pointed out that Scotland is different to other parts of the UK, is itself a land
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3 of contrasts and that the Scottish consumer is not typical of the remainder of the UK. This difference is normally illustrated by way of a contrast between the purchasing (and thus dietary) habits of Scottish as opposed to English consumers. Fernie and Woolven (1995) point out five such major differences; the higher percentage spend on food in Scotland, the more frequent food shopping trips in Scotland, the lower spending per visit to stores in Scotland, a stronger reliance in Scotland on manufacturer-branded products and a greater diversity of tastes in Scotland. Peat and Boyle (1999) note that within these patterns, Scottish consumers spend more on smoking, drinking and eating than their UK counterparts. This is combined with a Scottish diet that remains poor in fresh fruit and vegetables but high in fatty, often fried products and sweets, despite long-standing national targets to alter this balance (Scottish Office Department of Health 1996).

Some of these differences are economically and socially dependent, but cultural differences and experiences are also important, as well as the opportunity to shop for products (see Marshall 1995, Murcott 1998, for example). Some of these differences may be the result of the structure of the population and housing in Scotland as well as the economic situation in some locations (eg McKie et al 1998, McKie 1999, Skerratt 1999, Cummins and Macintyre 1999). The housing structure, allied to lower incomes and less availability of private transport are important components of behaviour and affect the ability to access shops and the retail structure itself.

However, whilst there are undoubtedly differences between Scotland and the rest of the UK, there are general trends in terms of demand and consumer behaviour that are more widespread, although the degree of each trend varies at the local scale. Table 1 provides a summary of the analysis in Dawson (1994) and it is argued that these trends have continued in the 1990s and seem likely to continue for the near future at least.

Some of the trends are well understood. The ageing of the population and the rise in the number of households, though they are smaller in size, should not come as any surprise. Similarly, the location of population growth is well known as are many of the other trends of how people live their lives. Consumer expenditure has risen, although the amount spent on retailing and food as a proportion of all spending, is in decline. Some of this spend has been transferred to eating out which has grown enormously, and which is causing food retailers to
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4 redefine convenience. Demand has fragmented with many new and varied products, services and solutions in place to meet different aspects of changing opportunities and lifestyles. People travel more readily (generally as well as on holiday) and there has been a widening of consumer horizons and thus expectations. These demands have forced retailers to think about the retail environment more carefully and to construct stores which meet perceived desires. Developments in ready meals, home meal replacements, sandwiches, soups etc are evidence of this trend which is focusing on meal components not ingredients and reflects time pressures and alternative desires of many (Dawson 2000). Again however, we must not get too carried away with a sense of development and progress. As Dawson (1994) points out, there is at least a two-tier demand system and access to facilities for shopping, including food shopping, is economically and socially constrained in many cases (Killeen 1994). For every new Sainsbury Central selling sushi there is a store splitting packs of cigarettes for resale. For each strawberry punnet in a supermarket in January or baby corn flown in from Zimbabwe, Peru or Indonesia depending on the season, there is a local shop selling sweets, crisps and Irn Bru by the gallon. The Curry Pot in Asda vies with the pizza supper at the local chippie. Access both physical and economic and the desire and ability to consume certain types of products are variable, and have altered dramatically, not necessarily for the better in health terms.

The culmination of this demand by consumers may perhaps be seen in the superstores and the chain store formats (Dawson 1995, Seth and Randall 1999). The leading retailers - see below - do provide a cornucopia of produce, packaged in attractive ways and often wellmerchandised. Much of this is retailer brand product. The range of fresh food is enormous. Organic products are exploding in breadth of range and sales. Ready meals and other chilled or fresh variants (home meal replacements) battle for share of stomach. Farm-assured and other traceable produce is available. Stores open when consumers want them and often have expanded into supporting services - pharmacy, post office, dry cleaning, cafe etc. The retailing process is fast and efficient in the main. The changing lifestyles and demands noted above find their match on the shelves and in the product and service innovation of the superstore retailers. In general the superstores and supermarkets provide a very good service to their target consumers.

Consumers are changing in other ways as well and these changes are being reflected in the retail offer. The size increase of stores has been associated with a greater sense of difficulty
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5 and frustration with shopping and this combined with other pressures on time and desires to do different things has pressurised retailers. One response, as noted above is in convenience needs, but convenience generally is becoming more of a theme and local stores are therefore becoming a developing format, as with Mace, CWS, Spar, petrol station shops, as well as Sainsbury Local and so on.

The Food Retailing System

One of the ways in which the changing food retailing system in Scotland can be understood is by considering some of the key companies. The most obvious Scottish food retailer was Wm Low, a business no longer extant, though many of the outlets are part of Tescos Scottish portfolio (Sparks 1996b). The takeover of Wm Low exemplifies many of the changes in the food retailing system. Wm Low paid the price for being too small, too inefficient and operating less than exciting and inefficient stores. It was taken over by Tesco, a business that has transformed its position in the last twenty years (Powell 1991, Seth and Randall 1999) and one that is now a global retailer. Tescos focus on new store development (initially superstores but now a range of formats - Table 2), its single minded retailer brand strategy (again multi-components), a reconstruction of its logistics and supplier base and its product and service innovation have marked it out as an excellent, world-class business.

The leadership of Tesco has propelled it into a very strong position by focusing on these activities. Other retailers have done the same (Dawson 1995, Seth and Randall 1999). Retailers have taken control of the supply chain and reconstructed it to reflect their power and ability to control activities. Suppliers and manufacturers have been relegated to a more subservient position. There has been a dramatic increase in the role and penetration of retailer brands in many companies eg Spar, Tesco, Asda (Burt 2000). The leading retailers are much bigger than many of their suppliers and certainly are more powerful in the relationships between them (Bowlby et al 1992, Dobson and Waterson 1999). Their use of retailer brands has enabled them both to better position themselves and to control more of the supply chain (Hughes 1996, Burt 2000). The reconstruction of logistics channels (Smith and Sparks 1993) has similarly increased their power. Retailer power has also been enhanced by moves to better understand consumers. Technology rich retailers have always had an ability to know what is
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6 selling, but the introduction of loyalty schemes has allowed them to know what is selling (or not selling) to whom. The information they collect is enormously valuable to them, and potentially to others. This position of the large retailers has been recognised as potentially a powerful instrument in changing food and diet behaviours, if harnessed properly (eg Scottish Office Department of Health 1996).

The growing size and concentration of the leading food retailers has been achieved by both organic growth and takeover. New store developments have been the driving force of much increase in market share. Opportunities such as Wm Low have been taken by the bigger operators. The size, scale and reach of these large retailers is considerable. As market share has been growing, so the impact on other businesses has been felt. Scotland has always tended to have more independent retailers than England in its make-up, and Co-operatives have also been strong historically in Scotland (Dawson and Brooks 1985). Langston et al (1997) also make the point that Scotland is different in this regard. This independent and Co-operative presence continues, but the proportion of food sales in a few multiple retailers has grown strongly and concentration ratios continue to increase. As stores have got bigger, in the main, and their effects have washed through the system, so the number of stores needed (or economically viable) has reduced, and the dominant organisational form has switched to the corporate retailers, often operating superstores. Even in smaller formats there has been a process of increasing organisational scale eg Symbol groups and Co-operatives have been expanding their alliances and scale.

The major change in food retailing since the 1970s has been the continued expansion of the superstore. This became for many food retailers the conforming store that was ubiquitous across the country. Off-centre locations with plenty of free car parking were desirable and customers flocked to such stores. This race for space, allowed in the 1980s by a less restrictive land-use planning regime and the increasing market share and dominance it provided, was the main consideration in most company strategies. As will be seen below however, Scotland with a different planning regime also saw a large increase in the large supermarket style of store. Guy (1996) in his case study of Cardiff shows clearly this changing retailing pattern and the role of corporate strategies of expansion and withdrawal in constructing the food retail landscape. The opening of a wave of superstores can be contrasted with a wave of closures of smaller stores, although Guy finds it difficult to blame
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7 trading impact alone for this, seeing the openings accelerate pre-existing trends. Whilst the timings in Scotland of such developments differ, the process is the same. However, the recession of the early 1990s, the tightening of planning restrictions, amid concerns over impact on other stores, town centres and the environment, a profitability crisis for some retailers (most notably Asda, Somerfield) and possibly a wider recognition that the race for space was unsustainable have caused a change in the market (Wrigley 1998). Again, Tesco is an exemplar in that their format development programme (Table 2) reinforces their brand, but develops store sizes and ranges to be tailored to markets and to demand patterns. Their foray into Internet retailing and home delivery adds to this portfolio. In short, the unidirectional strategy of the 1980s has been replaced in some retailers by a concern for a wider range of format types and locations to reflect the changing nature of the consumer.

This is also well exampled by other developments in Scotland. The introduction of Shoprite (Sparks 1996a) which filled a perceived gap in the market, though eventually a failure, did pave the way for stronger soft and hard discount formats. There is some evidence however that some of these outlets (eg Kwik Save) are poorly located, but permissions for new ones (eg Aldi, Lidl) are somewhat more restricted than might have been expected. Smaller convenience stores have seen a renaissance through corporate or contractual chain operations as at petrol stations and local stores (eg Alldays, Spar, Aberness, Morning, Noon and Night). Iceland and Farmfoods have reinvigorated the frozen food sector (and beyond). At the exclusive end of the market, Marks and Spencer continues to trade solidly. The Co-operative sector has developed its local operations and its smaller store formats are doing good business in meeting local needs. For some years the Co-operative in Scotland has been on the acquisition trail in terms of small stores. There are problems however and none of these operators (including discount stores) necessarily locates in the most disadvantaged areas, mainly for economic but also for social reasons, and so issues of accessibility and availability remain (Department of Health 1999). However there may well be local area solutions and improvements that allow retailers to feel confident in investing in such areas.

Retailing is dominated by the power of major operators and their control over supply systems and knowledge about their customers. The service and products they provide are desired by consumers and overall there are real benefits to the superstore economy. Some (eg Corfield and Welch 1997) would suggest that the success of such retailers has been undervalued by
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8 governments and more such stores should be allowed. However there are impacts and consequences, in particular in terms of perceived disadvantage through lack of access and facilities affecting particular groups (eg Skerratt 1999, McKie 1999, Raven et al 1995, Lang and Caraher 1998, Department of Health 1999), the impact on existing retailers particularly in certain types of locations (Hillier Parker 1998) and through environmental and supply chain considerations (eg Mitchell 1998, Wrigley 1998, Dobson et al 1998, Wrigley and Lowe 1996, particularly chs 2-5). In recent years some of the concerns over this power of retailers and particularly in terms of access to stores have perhaps begun to be addressed by new formats and retailers changing their strategies, as identified above. Questions remain however.

The Competition Commission investigation and the continual rip-off Britain commentaries suggest concern over the power and nature of food retailing. Food quality and food scares have dominated the newspapers for a number of years, and food retailers are in a particular position in this regard, being responsible in part for regulation and standards (Marsden et al 1998). The new Food Standards Agency has yet to begin its operations and again concerns over food retailers may emerge. Farmers continue to claim an inherent unfairness in the system and have collectively begun to retaliate through Farmers Markets and other schemes. The concept of food deserts seems to have gained currency (Lang and Caraher 1998 although initial findings in Glasgow suggest that there is no evidence for their existence on a store count basis (Cummins and Macintyre 1999)). The DTI and the DETR in England and Wales seem to be at private loggerheads over whether planning should be de-regulated to increase competition amongst food retailers as argued by McKinsey (1998) for the Treasury. Transport and environmental impact concerns continue to confront us, both overall in the economy and in particular with regard to superstores (Select Committee on Environment, Transport and Regional Affairs 2000) although without much progress on acceptable solutions. In short, there remain a series of questions about food retailing that we need to consider.

Food Retailing on the Ground in Scotland Today

Any analysis of Scotlands retailing situation is hampered by a problem; we have dreadful official statistics in the area of retailing. This arises from poor UK data on the topic and the level of disaggregation possible. The consequence of this is that we are not entirely sure how
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9 many shops there are in Scotland, nor where they are located (Smith and Sparks 1997). Table 3 provides an historical indication of the change in the number of outlets in Scotland and the contribution of food and grocery retailers within that total. One thing can be stated for certain; there has been a reduction in the number of shops in Scotland and that within this the proportion of food stores (probably both generalist and specialist) has declined. However there is little else that can be said with confidence. The most recent data in the series seem curious and in particular the series since 1990 seems to jump around, probably associated with definitional and sampling changes. These data suggest less decline in stores in Scotland than elsewhere in the UK. Our confidence levels in the official data however should not be high.

Tables 4 - 7 and Figure 1 provide some data on aspects of food retailing in Scotland. Data on the large formats are available from The Institute of Grocery Distribution which provides coverage of one aspect of Scottish food retailing. Market share figures are also available for companies, but there can be arguments over sampling etc, so these figures are best seen as indicative. For example the recent increase in supermarkets is due to the Somerfield takeover and re-branding of Kwik Save, and the market share figures for Tesco include the Wm Low data throughout, whereas Tesco gained a major part of this share in 1994.

The data in the tables and figure and the broader data from which they are drawn suggest a number of characteristics of Scottish food retailing and the changes the sector has undergone in recent years.

(a) Whilst there has been a sharp decline in market share, the relative market share of independents and Co-operatives in Scotland has held up better than in England and Wales (see Langston et al 1998);

(b) The number of superstores and other large off-centre retail forms in Scotland has not risen as rapidly as in England, though they still comprise a major component of the economic system with in particular supermarkets being a very important element in food retailing choice (see Findlay 1993);

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10 (c) There is proportionately a greater number of supermarkets and below superstore-sized stores in Scotland than elsewhere and these form a distinctive component of the Scottish market;

(d) The nature of the different urban and rural markets in Scotland have encouraged the development of smaller formats and convenience style stores;

(e) The penetration of the leading English-based retail chains has been quite a slow process, though is now extensive;

(f) The outcome in Scotland of three broadly similar market shares for the leading retailers is relatively unusual, if compared to regional levels in England.

The pattern that emerges from this brief description therefore is of a food retailing sector that is a little bit different to England and Wales. This is seen in particular in the big 3 market share in Scotland, the prevalence of supermarkets and in the persistence of independents and Co-operative stores. The general trends in terms of retailing structural change however are the same as elsewhere in the UK (Dawson 1994).

The Shopping and Retailing Implications There are many implications of the pattern of food retailing that we see and experience on the ground in Scotland. A number of these are identified below as being of particular importance in terms of the healthy food policy issues:

(a) There are far fewer shops in Scotland than in the past. This suggests that the choice set for consumers in terms of outlets is more restricted than before as inevitably fewer shops means fewer individual locations. It may be however that the choice offered by the large number of shops was illusory and certainly when product range is considered, the fact that there are fewer shops is not necessarily any indication of a diminution of range. Indeed retailing changes that have reduced the number of shops have also broadened the range, although there may also have been a loss of brand choice to compensate. Broadly,

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11 consumers are probably better served now by the modern food retail system than before.

(b) An implication of these changes has been an increase in size of some retail formats, but more generally a polarisation of shop size. The growth in convenience stores is counterbalanced by the growth in large superstores or even the Extra style hypermarkets. Whilst this polarisation is beginning to be compromised by middle sized stores, discount stores and so on, the broad polarisation thesis has driven food retailing for some years and has affected choice at the local level. Superstores offer an enormous choice set in food and have increased the breadth of this range in recent years, although brand choice within a line has been reduced. The range available to consumers is so extensive it raises issues of consumer choice methods to levels of new importance. The smaller formats however may offer a reduced choice at many levels including range, breadth and depth but focus on convenience.

(c) Quality is something of a personal viewpoint but it would seem that there has been a polarisation of quality in retailing. Figures on investment in retailing (Smith and Sparks 1997) show this clearly. The newer formats, by expansionary retailers are of a higher quality than many existing stores and cause investment issues for existing retailers. The ability and the willingness to invest are differentially present in the retail system, as is seen visually on the ground at store level. More fundamentally however there may also be a product quality difference due to the ability of retailers to gain supply and to sell product consistently, as well as retailer brand developments which have raised quality points (Burt 2000). It is clear that some retailers are better than others in this regard, and thus consumers get different experiences through their choices or access. Mitchell and Kiral (1999) demonstrate how consumers translate these attributes into risk perceptions of certain corporate businesses.

(d) These issues of shop size, location and number, together with the more qualitative aspects of their operations, come together for consumers in the question of access. Do people have access to facilities to purchase what they want, in the form they want, when they want? As food retailing has altered, it is clear that access has also altered and the availability of adequate food shopping has changed. The emphasis on car-borne shopping trips to bigger but fewer locations, allied to problems in public transport provision generally and to
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12 specific sites, have consequences for access to food shopping. Private provision of buses to stores is available in some locations but usage levels are unclear, and local retailers can be highly critical (Smith and Sparks 1997). The polarisation of retailing, the decline of local shops and the lack of mobility in selected locations does raise the possibility of food or shopping deserts (Lang and Caraher 1998, Bromley and Thomas 1995). The Department of Health lead Policy Action Team on Shops report (1999) makes clear the problems that deprived neighbourhoods are facing. These concerns are generally defined as being an urban phenomenon, but lack of access to facilities and the problem of quality is also potentially as much a rural or a remote issue in Scotland (McKie et al 1998). Consumers are only better off by modernisation if they have access; if they do not they are very likely to be worse off.

(e) Access however is not confined to the physical mobility or access to get to the store. Access has other characteristics including economic and physical aspects. Whilst a store may be available, the produce in the store may not be economically available to consumers. This could be a general pricing issue, the cash-flow of consumers or indeed the inappropriateness of the packaging sizes for selected consumers (pre-packed meat is not suitable economically when you can only afford one slice or hygienically if you have no storage facilities at home). Being able to get to a store does not mean that you can buy all you want either. Transporting bulky or heavy products is a problem for some people and on some modes of transport (eg for older consumers - see Hare et al 1999).

(f) It might be expected therefore that if there are so many issues with the larger stores, then local facilities will be a popular solution with retailers and consumers. To an extent we are seeing this in convenience stores and other food developments eg community stores etc. However local stores themselves do not necessarily have the answers, as many suffer from marginality, low demand and problematic standards (see Smith and Sparks 1997). Prices in such stores may be higher and quality lower, thus affecting the ability of consumers to meet their demands locally. Whilst obviously not true for all local stores, it is the case that often in deprived or dependent areas, the quality of the retailing does not stand out, and indeed consumers can despise the facilities on offer and the shopkeepers themselves (though the Department of Health (1999) found divergent views on this issue). This view of local retailing arises from a perception of local shopkeepers ripping-off the local area in quality
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13 and price terms (Smith and Sparks 1997). It is probably true that overall the difference between the best and worst independent and local shops is far greater than within the multiple sector.

(g) There are also implications for the community in the changing retail patterns. Whilst our image of the traditional local shopkeeper is a mythical golden nostalgic reminiscence, the reality is that local shops are usually more embedded in the community and can play a more substantial social and integrative role. Millers (1998) ethnographic study contains examples of these issues. For many people they are a lifeline to communication and to the outside world (Smith and Sparks 1997). However, in this context it is of note that supermarkets are now beginning to play this role, not only with their broad range of facilities (crche, pharmacy, cafe dry-cleaning etc) but also through their hosting of MP or MSP surgeries and so on.

The implications above are obviously a generalisation of the situation. The situation does vary from place to place in Scotland and local areas may be better or worse off. They may also affect different groups differentially and reactions can be different. Solutions therefore have to operate at a number of levels.

Futures and Questions

The future of many of the trends identified here is quite clear at one level but confused at another. Many of the consumer trends outlined here are set to continue. Only a large unforeseen shock to the system would really disrupt these. Many of the retailer trends outlined above similarly are set to continue and we can expect the retail system to continue to move in the directions suggested. Two major elements of change could alter this however. First, is the emerging technology of e-commerce and e-business. Internet retailing is in vogue at the minute and we are moving out of the experimentation phase in some cases. Tescos roll-out of its home delivery and Internet shopping offer is a case in point as is Asdas investment in Internet distribution centres. Icelands home delivery service is an alternative model. The uptake of such services, their effect on the built environment and retail outlets and

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14 their social and economic effects remain unclear however (OECD 1999, Sparks and Findlay 2000).

Whilst the Internet has potential, it does raise issues about accessibility to the Internet both electronically and financially and about the home logistics of a multiplicity of such systems and delivery needs. Such issues form one element of a recent scenario planning exercise on the future of shopping (Sparks and Findlay 2000), which foresaw increased social exclusion through Internet technology on the one hand, against an inclusive wired wonderland on the other.

The second concern, and also utilised in the scenario planning exercise referred to above, is the role of the Government. As the Select Committee on the Environment, Transport and the Regions (2000) has recently exposed, there appear to be conflicting views in Government over the best way to ensure competition amongst food retailers. One approach would be to deregulate the planning system to allow a rapid expansion of superstores on out-of-town sites to drive up productivity and reduce prices. As the Select Committee notes, this is economically worthy of thought, but the social consequences have not been thought through. Alternatively, Government could also undertake a series of other activities eg tax travel and car parking heavily, invest in a social Internet, provide subsidies for certain healthier products, break up the big retailers and so on that could radically affect the retail and consumer situation. It has also to be noted that in many of these areas, Scotland has devolved powers and could use them to create a different future to that in England.

From all this, it is possible to pose a number of questions that could form the basis of discussion or development of retail components of any policy towards food. Selected questions might be:

1. Assuming we (or someone?) could define the consumer interest acceptably, then are the large retailers operating in the consumer interest? If they are not, what are we going to do about it and would we countenance restrictions on their power and/or their break-up? If they are operating in the general consumer good, what incentive can we give them to further modify their operations to better match the urgent needs in disadvantaged areas?

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15 How can we harness their best qualities for all?

2. Do food or shopping deserts actually exist in Scotland? How do we define them? We might need to go beyond issues of physical access and store numbers to consider the questions of quality. If they do not exist, then what are our biggest problems on the retail side? Is there a rural and remote dimension to this that is peculiarly Scottish? If they do exist, what are our solutions and are they the same as in England?

3. Should large retailers be more regulated in general or in specific ways? Can the concept of planning gain be used further in this regard without causing legal problems and thus allow us to meet policy targets?

4. What can we do about issues of accessibility? If people can not visit stores then how do we get stores to people or does this lead to a two tier system? Is the Internet a solution if we can solve the economic and logistical problems? Can this be done in partnership with local shops? Are there other solutions to access?

5. How do we support services and endeavours or behaviours that we view as positive? For example village support schemes and other last shop ideas which provide social functions? Can we develop better schemes for community enterprises and local co-operative stores building on the expertise present?

6. What should be done to encourage the emerging but socially divided new forms of retailing such as Farmers Markets or organic box schemes and the like? If these are seen as good things in the healthy eating context then how can they be made more affordable and widespread?

There are no doubt other questions that can, and should, be considered. Our understanding is that the food retailing system in the UK (and thus Scotland) has produced in the last decade a modernised and highly efficient operation. Superstores have benefited many and do meet many lifestyle choices. There are externalities however that include access, in all senses, to the best, or most appropriate, retail facilities. The current planning system does seek to change
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16 retailer behaviour. If we believe that the healthy food policy is an access issue, then local facilities of the same standard of the superstores will be needed. These could take a number of forms, and it is probable it will vary from site to site. Perhaps however rather than focusing on the externalities of where we are, we might spend more time on constructing the methods by which we get to where we want to go. This might mean a technological solution in some locations, self help and community initiatives in others, incentives for desired social goals in more, or even positive planning for embedded supermarkets in others. If the issue is the quality of local retailing and supply security then perhaps the largest retailers can be used to provide assistance of other broadly-based schemes can be introduced (see Department of Health (1999) for a number of suggestions). Once we are clear on these objectives then maybe the methods of raising funding to meet them can be explored more constructively.

Figure 2 attempts to summarise some of these issues in terms of our views of two alternatives. If we believe the disbenefits of the current system of large-scale food retailing have come to outweigh the advantages, then we need to develop policies to get rid of them and to replace them with appropriate local facilities. Given where we are, this seems implausible and runs counter to all trends in the retailing systems of developed economies. An alternative is to build on what we have and the emerging trends, to reduce our dependency on superstores if appropriate and to search for ways to utilise their best points including the potential for retailer brand products and information dissemination, as discussed above. Either way however, it would seem that retail location can only go so far, in that it is the consumers who end up making the choices. There must therefore be investment in better access (in all senses of the word, and access does not necessarily mean going to the shops, if the shops/goods can come to you), education (again in the broadest sense, encompassing skills), information about products and choices (and labelling may not be the right answer) and products. In the latter case, there would seem to be an opportunity to encourage and incentivise good farming, processing and retailing practices, leading to lower prices, rather than simplistic notions of taxing bad things such as fatty products. In this debate, stomachs, as well as hearts and minds have to be won.

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17 References Bowlby S R, Foord J and C Tillsley (1992) Changing Consumption Patterns : impacts on retailers and their suppliers. International Review of Retail, Distribution and Consumer Research, 2, 133-150. Bromley R and C J Thomas (1995) Small Town Shopping Decline : dependence and inconvenience for the disadvantaged. International Review of Retail, Distribution and Consumer Research, 5, 433-56. Burt S L (2000) The Strategic Role of Retail Brands in British Grocery Retailing. European Journal of Marketing (in press). Corfield I and D Welch (1997) Sold Short : Government and Retailing. The Fabian Society, London. Cummins S and S Macintyre (1999) The Location of Food Stores in Urban Areas : a case study in Glasgow. British Food Journal, 101, 545-553. Dawson J A (1994) Review of Retailing Trends with Particular Reference to Scotland. Scottish Office Central Research unit, Edinburgh. Dawson J A (1995) Food Retailing and the Consumer, Ch 4 of Marshall D W (ed) (1995) Food Choice and the Consumer. Blackie, London. Dawson J A (2000) Grocery Retailing in Scotland: the next 10 years. Presentation at the Scottish Grocers Federation Annual Conference, Gleneagles, 5 February. Dawson J A and A M Broadbridge (1988) Retailing in Scotland 2005. Institute for Retail Studies, Stirling. Dawson J A and D M Brooks (1985) Food Retailing in Scotland. Paper presented to IFGA meeting at Peebles, 10th September. Dawson J A and S L Burt (1998) European Retailing - dynamics, restructuring and development issues, p157-176 of Pinder D (ed) The New Europe : Economy, Society and Environment. Wiley, Chichester. Department of Health (1999) Improving Shopping Access for People Living in Deprived Neighbourhoods. National Strategy for Neighbourhood Renewal, Policy Action Team 13, Paper for Discussion. Dobson P and M Waterson (1999) Retailer Power : recent developments and policy implications. Economic Policy, 28, 135-166. Dobson P, Waterson M and A Chu (1998) The Welfare Consequences of the Exercise of Buying Power, Research Paper 16, Office of Fair Trading. London.

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18 Fernie J and J Woolven (1995) The Scottish Grocery Market : an overview. International Journal of Retail and Distribution Management, 25, 10, 21-7. Findlay A M (1993) The Dynamics of Superstore Location in Dawson A, Jones H, Small A, Soulsby H (eds) Scottish Geographical Studies, Universities of St Andrews and Dundee, 305316. Guy C M (1985) The Food and Grocery Shopping Behaviour of Disadvantaged Consumers : some results from the Cardiff consumer panel. Transactions of the Institute of British Geographers, New Series, 10, 181-90. Guy C M (1996) Corporate Strategies in Food Retailing and their Local Impacts: a case study of Cardiff. Environment and Planning A, 28, 1575-1602. Hare C, Kirk D and T Lang (1999) Identifying the expectations of older food consumers : more than a shopping list of wants. Journal of Marketing Practice : Applied Marketing Science, 5, 213-32. Hillier Parker (1998) The Impact of Superstores on Market Towns and District Centres. HMSO, London. Hughes A L (1996) Retail Restructuring and the Strategic Significance of Food Retailers Own Labels : a UK-USA comparison. Environment and Planning A, 28, 2201-26. IGD (1999) Store Directories 1999. Four Volumes. IGD, Letchmore Heath. Killeen D (1994) Food and Nutrition, Chapter 4 of Fyfe G (ed) Poor and Paying For It Scottish Consumer Council/HMSO, Edinburgh Lang T and H Caraher (1998) Access to Healthy Foods : part II. Food poverty and shopping deserts : what are the implications for health promotion policy and practice? Health Education Journal, 57, 202-211. Langston P, G P Clarke and D B Clarke (1997) Retail Saturation; Retail Location and Retail Competition: an analysis of British Grocery Retailing. Environment and Planning A, 29, 77104. Marsden T, M Harrison and A Flynn (1998) Creating Competitive Space : exploring the social and political maintenance of retail power. Environment and Planning A, 30, 481-498. Marshall D W (ed) (1995) Food Choice and the Consumer. Blackie, London. McKie L (1999) Older People and Food : independence, locality and diet. British Food Journal, 101, 528 - 535. McKie L, Clark G M, MacLellan M and S Skerrattt (1998) The Promotion of Healthy Eating : food availability and choice in Scottish island communities. Health Education Research, 13, 371-382.

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19 McKinsey (1998) Driving Productivity and Growth in the UK Economy. McKinsey Global Institute, London. Miller D (1998) A Theory of Shopping. Polity, London. Mitchell S (1998) Checking Out the Supermarkets : competition in retailing. Liberal Democrat Party, London. Mitchell V-W and H R Kiral (1999) Risk Positioning of UK Grocery Multiple Retailers. International Review of Retail, Distribution and Consumer Research, 9, 17-39. Murcott A (ed) (1998) The Nations Diet. Longman, Harlow. OECD (1999) The Economic and Social Impact of Electronic Commerce. OECD, Paris. Available from http://www.oecd.org/) Peat J and S Boyle (eds) (1999) An Illustrated Guide to the Scottish Economy. Duckworth, London. Powell D (1991) Counter Revolution : the Tesco story. Grafton , London. Raven H, Lang T and C Dumonteuil (1995) Off Our Trolleys? Food Retailing and the Hypermarket Economy. Institute of Public Policy Research, London. Scottish Office Department of Health (1996) Eating for Health : a diet action plan for Scotland. HMSO, Edinburgh. Select Committee on Environment, Transport and the Regions (2000) Environmental Impact of Supermarket Competition. Second Report, available at http://www/publications.parliament.uk/pa/cm199900/cmselect/cmenrtra/120/ 12006.htm Seth A and G Randall (1999) The Grocers : The rise and rise of the supermarket chains. Kogan Page, London. Skerratt S (1999) Food Availability and Choice in Rural Scotland : the impact of place. British Food Journal, 101, 537-544. Smith A and Sparks L (1997) Small Shops and Retailing, Scottish Office Central Research Unit, Edinburgh. Smith D L G and L Sparks (1993) The Transformation of Physical Distribution in Retailing : the example of Tesco plc. International Review of Retail, Distribution and Consumer Research, 3, 35-64. Sparks L (1996a) Challenge and Change : Shoprite and the restructuring of grocery retailing in Scotland. Environment and Planning A, 28, 261-284.

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20 Sparks L (1996b) Space Wars : Wm.Low and the Auld Enemy. Environment and Planning A, 28, 1465-1484. Sparks L and A Findlay (2000) The Future of Shopping, Volume 2 of RICS Research Foundation (2000) 2020 : Visions of the Future. RICS, London. Wrigley N (1998) How British Retailers have Shaped Food Choice, Ch 7 of Murcott A (ed) (1998) The Nations Diet. Longman, Harlow. Wrigley N and M Lowe (eds) (1996) Retailing, Consumption and Capital. Longman, London.

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21 Table 1: Changes in Demand and Consumer Behaviour (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) Increased consumer expenditure Increased fragmentation of consumer demand Increase in number of households Increased consumer mobility Ageing population Relocation of population (counter-urbanisation) Shopping viewed as leisure activity Widening of consumer horizons Increase in female participation in the formal workforce Two tier consumer demand Clearer identification of requirements for retailing as a sector Consumer expectation of improved environment

Source: Adapted from Dawson (1994), Table 1.3.

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22 Table 2: Tesco Formats

UK STORE FORMATS Number of Stores

Very large stores including an extensive range of nonfood Worlds Large stores offering a full food range and many nonfood products Our superstore range, but within a more compact environment High street stores, mainly selling food ranges and household goods City-centre stores serving the needs of a busy working population Petrol station forecourt shops selling a range of everyday products

Average sales area (sq ft) 80,600

Extra

Superstore

269

38,600

Compact superstore

67

20,700

Other stores

240

13,800

Metro

41

11,100

Express

17

2,100

639 Source : Tesco Annual Report (1999) (available at http://www.tesco.co.uk/)

25,000

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23 Table 3 : Retail Outlets in Scotland 1961-1996

Total

Food

Drink/ Confectionery 8,500 5,500 5,044 4,554 5,484 6,069 5,309 8,174 10,046

Percentage Food/Drink/Tobacco 64% 56% 50% 54% 48% 51% 45% 38% 40%

1961 1971 1976 1980 1986 1990 1992 1994 1996

50,800 42,400 31,217 28,437 29,539 31,182 30,128 21,664 24,830

24,000 18,400 10,536 10,927 8,730 9,784 8,368

Source : Retail Inquiries

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24 Table 4 : Large Food Stores in Scotland 1999 Superstore (25K<) Borders Central Dumfries & Galloway Fife Grampian Highlands Lothian Strathclyde Tayside Islands 2 5 1 6 9 3 10 46 10 Supermarket (10K>25K) 3 10 7 10 14 7 29 73 15 5 Small Supermarkets (3K>10K) 9 5 7 11 22 13 48 61 18 2

Source : IGD Stores Directories 1999

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25 Table 5 : Superstores and Supermarkets in Scotland by Operator 1999 Superstore (25K<) Asda Safeway J Sainsbury Savacentre Somerfield Tesco So-operatives 29 26 8 1 3 17 8 57 37 26 Supermarket (10K>25K) 1 50 2

Source : IGD Stores Directories 1999

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26 Table 6 : Characteristics of Superstores and Supermarkets in Scotland 1999 Superstores (25K<) Av. Sales Area (000 sq.ft) Scotland Wales North Yorks & Humberside West Midlands East Anglia South West South East North West East Midlands 35.1 35.9 39.4 37.6 36.4 34.1 34.7 38.5 35.3 36.7 000 popn per store 55.7 53.1 56.2 50.9 52.1 43.7 48.4 55.8 49.6 49.3 Supermarkets (10K>25K) Av. Sales Area (000 sq.ft) 14.9 14.0 15.6 14.6 15.7 16.9 16.0 16.6 14.8 15.9 000 popn per store 29.6 40.0 43.5 52.5 48.8 37.6 32.7 44.2 57.7 43.1

Source : IGD Stores Directories 1999

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27 Table 7 : Market Share in Scotland (%) 1991-1999

1991
Safeway Asda Tesco Somerfield Kwik Save Sainsbury All Others 17.4 12.8 14.4 5.6 0.0 2.2 47.4

1992
17.6 12.3 15.3 6.0 0.0 2.6 46.1

1993
16.5 13.3 16.1 6.6 2.7 3.2 41.7

1994
16.5 12.6 14.3 6.8 6.5 4.3 40.0

1995
17.4 13.9 13.7 6.2 6.2 4.2 38.3

1996
18.7 15.1 15.3 6.4 5.9 3.7 34.9

1997
19.3 15.6 16.5 6.5 5.6 4.0 32.6

1998
18.6 16.9 17.7 6.9 4.9 5.3 29.7

1999
19.2 18.8 16.9 6.2 5.6 4.9 28.4

Note: Figures for Tesco before 1994 include Wm Low though it traded separately Source : Taylor Nelson Sofres Superpanel - month 08

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28 Figure 1 : Superstores and Supermarkets in Scotland

Source : IGD Store Directories

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29 Figure 2: Superstore Issues Have Superstores Delivered the Goods?

No

Yes or Yes But

* Close Them Down * Tax Them Shut * Incentives for Alternatives

* Duplicate the Best * Reduce Externalities

* Then What? * Local Shops? * Market Focus Still? * Price of New Forms?

* Recognised Brand Partnerships * Internal Solutions (for all) * Traffic Pricing? * New Locations

Issues * Inflation Rises * Entrepreneurs? * Gender Discrimination * Consumer Habits

Issues * Social Internet * Logistics * Incentives for Development? * Site Acquisition * Consumer Habits

How Do We Change Consumer Habits? * Better Access (Physical and Economic) * Better Education * Informed Choices * Product Development

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