Chains likely to tighten grip on market

ONLY large multiples wanted in Ireland. No place any longer for the smaller grocery store.

That’s the implication of the Competition Authority’s ruling that below-cost selling, banned in 1987, should again be permitted.

What’s most insidious about this recommendation is the claim that it would be of major benefit to the consumer.

In the context of modern economies, the consumer has been elevated to a status that is totally unreal.

It’s quite extraordinary. Everything is attributed to the consumer, who in reality is as anonymous as the jar of coffee or the pack of kitchen rolls sitting on the supermarket shelf.

If the marketers are to be believed, the consumer has more power than the president of the United States. No mere president, in fact; the consumer is king in modern day marketing-speak.

That’s the new mantra. Its true purpose is to further the interests of the big multiples, whose grip on the British and Irish grocery markets is pervasive.

We are in fact following the pattern begun in the US, taken up in Britain and more recently here, that idolises big shopping centres and multiple stores.

In Ireland, Tesco is now the dominant supermarket chain and its grip on the Irish economy is increasing.

Not that there is anything wrong with Tesco. This is not a debate about Tesco or Dunnes Stores or any other particular store.

We capped the size of stores in Ireland to prevent big chains sucking the lifeblood out of local communities, which has happened in Britain to a very serious degree. The British have fallen in love with their out-of-town shopping centres.

The Dundrum Shopping Centre in Dublin, said to be Europe’s largest, is from this shopper’s point of view pug ugly. It’s heartless, soulless and has very little to do with giving the consumer what he or she wants. The car park is good though, I’ll grant it that much.

Overall, it’s an abomination in the middle of what was one of the capital’s nicer suburbs.

It’s a step backwards, but the consumer is happy about it and the consumer is king.

The consumer, however, cannot be let off the hook on this. The consumer is no king in a modern market economy, but rather a puppet whose strings are yanked by the latest marketing ploy or brand and who dictates very little.

A classic case, going back 20 years, was the emergence of the deep freezer. People went mad buying up beef and lamb to store away for the rainy day.

This was supposed to be the ultimate in convenience as well as a huge money saving device. It was a clear case of the consumer being led by the nose.

You won’t find too many cabinet freezers in modern homes today, packed with meat that may or may not be eaten.

In the end this is about what kind of society and economy we want. Tesco is on the march. It got around the planning laws by adapting its strategy and introducing smaller stores.

Now the Competition Authority has decreed it in the best interests of the consumer that we lift the ban on below-cost selling.

For the record, the €500 a year additional cost to the average shopper allegedly caused by the ban works out at €10 per week. It’s about the price of two pints in a trendy pub!

The impact on the consumer, if that is who the key focus is on, is miniscule.

However, the broader aspect of this debate has much bigger implications for the way Ireland as an economy and society is headed.

The big chains now have 80% of the total Irish grocery market.

Lifting the ban on below-cost selling will help them tighten their grip. This is not about the consumer, but try telling that to the Competition Authority.