Will small business survive the franchise wars?

As a small business owner I’ve always been an advocate of supporting the small independent retailer. I always have, and always will, prefer to give my hard earned money to a small business rather than a large chain store. 

Unfortunately, I’m finding this ethos more and more difficult to follow in my local community as there are a number of “sticks” pushing me towards the big boys.

I live in the coastal town of Paignton which boasts a moderate sized population of approximately 50,000 people. Over the last decade our local council has given planning permission to every major supermarket, while at the same time hammering the smaller retailers in the town centre with a proliferation of parking meters. Parking in the town centre even for a couple of minutes would set you back a pound and so the out of town Sainsbury’s and Morrison’s are doing a fine job of mopping up the once local trade.

The situation reminds me somewhat of the cheesy action flick “Demolition Man” – please bear with me – as, although I’m aware that it’s undoubtedly a Sunday morning hangover film, there are parts which seem quite representative of the way in which we are moving. Set in a dystopian future, the story focuses on an ex-policeman who was cryogenically frozen from our time only to be bought out to life many years later in an unfamiliar world. 

I hope you’re still with me.

There’s one scene in particular where our hero saves the life of the city leader and is subsequently invited out for dinner at American fast food chain Taco Bell. Being unfamiliar with this time period, he naturally expresses confusion that the reward for saving the life of the most powerful man in the city is dinner at a budget fast food joint. It would be the equivalent of saving the Queen only to have her take you out for a Big Mac and fries as your reward.

It is explained that in the future Taco Bell is now the only chain of restaurants that survived the franchise wars – so now, literally every restaurant is a Taco Bell. No one thinks this odd and everybody enjoys their evenings out at Taco Bell as they know no different.

Although fictitious, we’re not a million miles away from this situation and we’re actively taking steps towards this kind of future. Twenty years ago when my town didn’t have a single major supermarket we had a thriving town centre with many locally owned and run businesses. Now every major supermarket has a place in our small town and it seems the only ones not struggling in the centre are charity shops, presumably as they don’t have the cost of stock or business rates to worry about. It wouldn’t be unrealistic to assume that if I wanted to buy a pear in twenty years’ time, it would have to be purchased in an Asda store.

Although I believe in the free market and open competition I do believe that government and local councils have a duty of care to ensure they’re not exasperating the situation. Local councils shouldn’t try to plug holes in their budgets by decimating entire town centres with parking meters. At the same time national government should tighten planning restrictions to ensure that large chain stores and supermarkets aren’t given a significant competitive advantage, and a captive audience.

I struggle to digest the newspaper headlines whenever our council gives the green light for yet another out of town supermarket… “Council creates 400 jobs by giving planning permission for new development” and so on it goes. Unfortunately, this headline is incredibly misleading and self-serving. These are large corporations which enjoy low tax bills, low business rates and low staff costs. The majority of supermarkets now even get you to serve yourself by way of a self-service checkout so their staffing requirement is minimal.

You will never “create” a job by opening a supermarket; the entire concept is an oxymoron – you simply redistribute a larger number of jobs to a smaller number of jobs in a different location. We have to assume that the creation of these 400 jobs comes at the cost of 600 jobs from smaller businesses; as such the headline would be more accurately written as “New supermarket puts 200 people in to unemployment and places further pressure on local town centre”. Not quite as catchy.

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