Supermarkets become super dominant

Globalisation has created an ‘I want it now’ culture, which feeds directly into the hands of multi-brand retailers. But there may be hope in the fight against Pacman.

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The British retail industry is being decayed by a concept known as the ‘McDonaldization of society’. Multi-brand stores that buy big and sell cheap are lapped up in an age of ‘I want it now’, providing the quickest route from desire to satisfaction. After addressing this trend in a recent article, I was pleased to see the kind people at the Payments Council had taken my concern on board and quantified the unfortunate demise of the British consumer.

According to the payments services watchdog, we now give 58p of every pound we spend in the retail sector to supermarkets such as Tesco and Sainsbury’s. This marks an increase from only 46p a decade ago, with the supreme dominance of the multi-brand shops coming at the expense of high street retailers, which have seen spend fall by nearly half.

What’s particularly worrying is that we’re not just spending on food. Sainsbury’s revealed yesterday that annual sales in its general merchandise business hit £1 billion for the first time, with non-food sales – including homewares, clothes and cookware – growing at three times the rate of food.

That’s capitalism

What this shows is that capitalism is as much a consumer drug as it is a business vice. The reason we allow it to work is because people crave order, guidance and routine. We might like to complain about the richest one per cent of the population owning a quarter of total UK wealth (the richest half control no less than 94 per cent), but we are ultimately responsible for our own demise. As we worship our emperors, kings and queens, we forget how feeble they would all be without the support of the majority.

When the tax evasion fiasco involving Starbucks, Amazon and Google surfaced in December, Eric Schmidt, chairman of Google, defended his company against criticism of its tax affairs saying: “It’s called capitalism.” He’s right in principle, I argued, but that’s not to say it’s right.

So when Sir Terry Leahy, the former boss of Tesco, described the rise of supermarkets and the closure of small shops as ‘progress’, I was equally aggrieved to see how capitalist systems are (lawfully, and with the consent of the public) tearing our society apart. If we want British-based companies to pay corporate tax and our burgers to be made of beef and not horse, we have to be reactive. With great power comes less responsibility, but if we show our presence as the majority, these trends can be reversed.

Gobble gobble gobble

The western world is just the start for ‘MacDonalized’ businesses. India is the latest country to be exposed as the central government announced it would allow multi-brand retailers such as Walmart, Carrefour and Tesco, as well single brand majors such as IKEA, Nike, and Apple to set up shop in the country.

But there are signs that developing nations aren’t ready for multi brand, and are opposing corporate expansionism by unleashing consumer power. Tesco has pulled back from China, Wal-Mart is adding outlets more gradually than it had planned and Carrefour is closing shops in Singapore after failing to overtake domestic competitors.

As retailers play market pacman in the west, gobbling every high street store in their path, the emerging markets are showing admirable resistance to the McDonaldization of their societies. Tesco argue it’s only a matter of time before they yield, but as the multi-brand giant fights to win over the biggest populations in the world, they are getting a stark reminder of their minority stake in a battle against the majority.

“If we have chosen the position in life in which we can most of all work for mankind, no burdens can bow us down, because they are sacrifices for the benefit of all; then we shall experience no petty, limited, selfish joy, but our happiness will belong to millions, our deeds will live on quietly but perpetually at work, and over our ashes will be shed the hot tears of noble people.”

Karl Marx, Letter to His Father, (1837)

By Jack Peat

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