Bookmark and Share David Boyle is a nef fellow, a writer and the editor of nef‘s newspaper, Radical Economics.

Are Tesco's claims about jobs correct?

Tesco’s spokesman Lucy Neville-Rolfe claims that the government’s new competition test will cost 25,000 jobs over the next decade.  This is highly misleading, and not just because Tesco are now firmly in the anti-competition camp.  Actually, as most people have known since Adam Smith, more competition usually means more jobs.

What this nonsense seeks to avoid is the truth which has devastated so many local economies over the past decade – some retail developers build the local economy; some corrode them.

It is highly misleading to suggest that all Tesco developers create jobs, when research suggests that most big supermarket developments are net destroyers of jobs.  It’s as if Lucy Neville-Rolfe and her kind are able to add, but are blind when it comes to subtracting.  The jobs in a new Tesco have to be offset against those which disappear as a result.

Local authorities need to do much more to distinguish between new stores which will be genuine anchors – which will bring in more customers to the local high street, and increase the money that stays circulating in the local economy – and those which won’t.

Sadly, many Tesco stores are not actually providing anchors to the surrounding shops.  They are intending to compete with them and, since the big four supermarkets are semi-monopolies – which have huge power over suppliers – they will tend to drive out any local competition.  Companies which, like Tesco, intend to compete in nearly every local market will rarely be effective anchors.

If you wonder why so many of our local economies have been hollowed out, here is the main reason: we have been using wealth destroyers as anchor stores.

So next time someone like Lucy Neville-Rolfe talks about the jobs that are not being created because someone has had the temerity to put some mild block in their path, ask them to do some proper arithmetic.

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