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Village Shop Defies Might Of Tesco

All over the country, supermarkets are squeezing rural retailers out of existence. Here?s the tale of one village shop that refused to roll over and die.

Tealby is a tiny village on the edge of the Lincolnshire Wolds, a beautiful area of rolling hills in one of England?s most rural counties. Just down the hill from the church is a wooden shop with a traditional pantiled roof, and on a chilly December afternoon it has a steady stream of customers, engaging in at least as much conversation as commerce.

In many ways it is a picture postcard of a vanishing Britain.

Tealby is lucky. It has a garage, a butcher?s shop and two pubs. Next door to the shop is a part-time library.

?That?s our internet caf? next door,? joked one of the ladies staffing the shop.

?Yeah, you have to make your own coffee though,? said another, adding: ? I?m not sure it?s got an internet connection either!?

Tesco arrives

Late last September came the news that any village shopkeeper dreads. An 18,600 square foot Tesco superstore built just four miles away in Market Rasen, was now open. The effect on this tiny shop was immediate.

?Our sales dipped quite dramatically. We went down 20% overnight,? said Peter Stooke, who chairs the group that runs the shop. Takings, which stood at ?800 a week before the Tesco store opened, plunged to ?630 within four weeks. Things were looking grim.

Vanishing stores

Countryside Agency figures show that for the vast majority of British villages, the battle is already lost. More than 70% of the country?s 10,000 villages have no shops at all.

A report by the New Economics Foundation said that 13,000 local shops such as butchers, bakers, fishmongers and newsagents closed between 1997 and 2002. Across the country as a whole, urban and rural convenience stores are still closing at the rate of 2,000 a year.

Once a village shop closes, a wedge is driven into the community between those who can simply drive to the nearest supermarket and the elderly, disabled or less well-off who have no access to transport.

NEF?s report on ghost town Britain (opens in new window)

The Tealby shop, however, is not what it appears. It is part of a charitable community enterprise which embraces a post office, doctor?s surgery plus the library, all rolled into one.

Being non-profitmaking, it was able to win a zero business rating from the local council. Apart from one part-time shop manager, it is staffed by unpaid volunteers. With such a low cost base, it should be more economically robust than the typical village shop.

Government initiative

There?s bigger backing too. This shop and hundreds of other community-owned enterprises like it, are the spearhead of a Government-led initiative, first announced in 2000, to revitalise rural services and communities.

The baton has been picked up by many other organisations, pretty much a who?s-who of rural initiatives, plus the European Union regional development fund.

The shop, in its current community-owned form, was only set up in 2004. There are a lot of backers who don?t want to see it fail.

Supermarkets are a symptom, not the cause of the disintegration of rural life. Many people love the idea of living in villages or country towns, for the quality of life and particularly for local schools hidden from city pressures.

But most jobs remain in cities and tiny country lanes heave with commuter traffic.

Two-income families may mean more money, but shopping can often only be done at weekends or in the evenings. This suits the supermarkets but not the traditional high street or village store.

Use it or lose it

Across the country, rural residents like to live in a village with a post office, shop or pub.

This desire is reflected in the higher house prices demanded for such character villages. Yet it is not reflected in the actual use made of them.

Quite simply, if residents want a village shop to survive they have to use it. In Tealby, the shop?s future is only secure ? even with its minimal overheads - when each of the 230 households spends an average ?3 a week at the shop.

Tealby fight-back

When Tesco opened its store in Market Rasen, Peter Stooke went to assess his rival.

?We couldn?t compete on the price of anything but toilet rolls,? he said.

Having assessed the special offers he had an idea. Perhaps he could negotiate with Tesco to sell some of its branded produce through the Tealby shop?

?Old ladies don?t want to buy one, get one free. They just want one, cheap,? he said.

Despite letters and phone calls, weeks went by with no response from the Tesco store. Finally, a reply came and it was ?Yes?.

An informal deal was agreed whereby Tealby stores could buy branded produce (no own-labels) and re-sell it with a modest mark-up.

This may not seem much of a concession, but Stooke said that neither Morrisons nor Sainsbury would allow him to do it when he approached them. In pure commercial terms, Tesco shouldn?t have much to fear in lost sales, as Tealby store?s weekly purchase would barely fill a single trolley.

At Tesco?s headquarters, a company spokesman said he was aware that small shop sometimes did this, but said there were no problems so long as the scale of purchases was reasonable.

Nasty fights

While the village of Tealby reached an agreement with the giant supermarket on its doorstep, there are no signs of truce in other areas of the country.

When Tesco opened a 16,000 square foot store in the Yorkshire seaside town of Withernsea in 2004, it tried to poach some of the staff employed by the long-established local supermarket, Proudfoot.

A Tesco representative handed out ?You?ve impressed us? cards with a recruitment telephone number to Proudfoot staff. The store manager and 10% of the staff went.

Though sales at Proudfoot fell 20%, it responded with price cuts of its own and initially stabilised the situation.

Tesco then responded by sending vouchers to 60,000 local households offering an unprecedented ?8 discount on every ?20 spent. Even Tesco loses money at this level.

Store owner Ian Proudfoot complained to the Office of Fair Trading about predatory pricing, but it refused to investigate.

?They (the OFT) had a golden opportunity to use their teeth, but they found they only had a set of dentures,? he told me.

Take it or leave it

Mr Proudfoot told me that Tesco had set its sight on destroying his firm when he refused to sell its existing store in Withernsea to them.

?A senior Tesco executive said ?take it or leave it. If you leave it, we?ll knock you out of business?,? he said.

A Tesco spokesman responded by saying that he wasn?t aware of any such incident. ?If that did happen, it is certainly unfortunate. It is certainly not the Tesco style.?

Proudfoot says he doesn?t mind competition so long as it is fair.

?Low-cost selling should not be legislated against, except when it is part of a focused campaign to eliminate competition,? he said.

See Nick Louth's earlier article: Tesco, the bigger they are the harder they fall

Blame the supermarkets? Look in your own fridge first

Almost all of us use supermarkets. Indeed, firms like Tesco, Sainsbury and Asda couldn?t have grown to the size they are without consumer backing.

We love them for their low prices, huge range of produce, the convenience of getting everything in one trip, and doing it when it suits us.

Individual decisions perhaps, but millions of such decisions built the industry. Those decisions are now changing the face of the country.

The question is not whether we should use supermarkets, but how completely we should depend on them.

The survival of village shops, independent convenience stores, traditional high street butchers, greengrocers and bakers, covered markets and many other types of retailing is vital to keep communities viable.

As for Tealby, Peter Stooke is happy with the deal he has made.

?We?ve only done one Tesco shopping trip so far. We?ve got some wine there, and a few other bits and pieces. What I?d really like to do is to see if we could get better terms (from Tesco) than just paying the retail price.?

For Britain?s largest retailer, that might be a concession too far.

By Nick Louth