James' Blog
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James Lowman
Chief Executive
Manifesto Club Nonsense
2 September 2010
Thanks very much indeed to the Manifesto Club for putting out their latest ill-thought missive demonizing retailers on the day before I set off on holiday. Too often, these last days in the office can be a bit strange, trying to work through the various knotty things that need to be sorted out, while of course being mentally focused on the week of relaxation ahead.
So it really was with perfect timing that the Manifesto Club issued a report criticising retailers’ “incessant demand for ID”, thus giving me the chance to write an angry blog before leaving the office. To be fair, the Manifesto Club’s report does acknowledge that retailers are responding to requirements from the Licensing Act (which was 2003 legislation, not 2005, on a point of pedantry). But what did they want the Government to do – declare open season for under-age drinkers and smokers?
The situation is dazzlingly clear, and I simply don’t believe that Josie Appleton and Phil Booth, who are leading the anti-ID agenda, can’t see this. Retailers can lose their livelihoods if they sell alcohol to someone under age. To explain this a little more clearly, Josie and Phil, there are these people called entrepreneurs who invest their own money in a business to meet a customer need in the hope that they will do this well enough to make a profit. If they break the law while trading, they can lose everything. In this particularly instance, enforcement is extremely tough and so retailers have to ask for ID.
The Manifesto Club’s specific gripe is that retailers are using Challenge 25 policies which mean that some people well over 18 get asked to prove their age. The fact is that it is impossible to tell how old someone is just by looking at them, therefore retailers have to give themselves some leeway and work on the basis that it’s pretty rare for someone to look a full seven years younger than they are. Some retailers go as far as a Challenge 30 policy because they want to give themselves an even great margin for error, and I support them in taking this difficult step.
This report is spectacularly irrelevant and badly focused, but the good news is that because I’m just leaving the office, I don’t have to read it cover to cover. Time well saved.
The Truth, The Facts... and Statistics
24 August 2010
We’re all familiar with the “Lies, Damned Lies and Statistics” line that comes out every time someone tries to prove something through anything as radical as actual data. The point is that you can read statistics a number of ways and prove what you want to with them, but actually I think this phrase is a pretty lazy cliché and is largely untrue.
We shouldn’t be afraid of going to the raw data and analysing it properly. What actually causes the problem isn’t that the statistics tell us a lie, but that what we add to those numbers and how we fill in the gaps is subjective, so we can end up with radically different interpretations.
Never was this more true than last week when the government released statistics on youth smoking. The actual data is not under dispute: a 7% reduction in youth smoking between 2007 and 2010. This covers the period of time since the increase in legal tobacco purchasing age to 18. You may have noticed that both ACS and Cancer Research put out statements on the day the youth smoking figures were released with polar opposite views of what these statistics (over which there was no dispute) told us.
ACS said that this reduction in youth smoking showed that we didn’t need a display ban to make an impression on the hared objective of reducing youth smoking. Cancer Research said that the reduction in youth smoking since the legal purchasing age went up to 18 was proof that legislation works, so we need some more of it.
I dare say that I would have taken the same view in Cancer Research’s position, but it really doesn’t add up. Why would one piece of legislation have the same impact as another totally different piece of legislation? What about the evidence from Canada that some youth smoking rates have gone up since the implementation of a display ban (a trend that I’m not claiming is directly causal, but one that at very least undermines claims that legislation necessarily equals a reduction in youth smoking)?
I suspect that the truth behind the numbers is very simple. Smoking rates have been declining for decades and fewer parents are smoking, which means that, given the biggest indicator of whether you are likely to smoke is whether your parents smoke, we’re moving in the right direction with each generation. I don’t think unproven and costly legislation is the way to continue this trend, and I don’t think any of the statistics from the UK or Canada tell us that a display ban is the best way forward.
Cameron's First 100 Days
18 August 2010
As landmarks go, this week’s hundredth day of the new Government is about as meaningless as they come – no more relevant than the ninety-ninth or hundred-and-first, and a very short space of time in the context of the country is facing such serious long-term, strategic issues. But of course it’s a nice round number, so anyone and everyone is volunteering their opinion on whether David Cameron has made a good, bad, or indifferent start to the job of being Prime Minister.
So here’s the verdict on behalf of local shops – which of course some retailers may disagree with in which case I’d be interested to hear their views.
Before the election, while most of my colleagues in the sector were reticent about publicly supporting any one party, there was a sense that the increasing business costs arising from thirteen years of Labour government had to stop, and that a change of Government would on balance benefit the sector. When it transpired that we would see a coalition government, there was generally even more optimism that this would deliver a more balanced approach to regulation and a more sympathetic view of business.
I think that already looks like wishful thinking, and that the twin threats of more localised decision-making and increasingly tough alcohol policy make the next five years (or however long it turns out to be) look like a rocky road for local shops.
I’ve written about the localism agenda before, and basically my argument is that when you allow decisions on things like planning and minimum alcohol pricing to be put in the hands of local authorities, with no willingness from national government to ensure that policy is being followed, that undermines consistency and good regulation. I don’t think the assumption that the more local the decision-making, the better the decision will be, holds true - there are countless examples of terrible local decisions. Of course local people should have a say in decisions affecting them, but there’s a line between local democracy and tyranny of the active minority of local people which is suddenly looking very fine indeed.
Just as businesses’ rights have been over-ridden by the dogma of localism, so they are being put under threat by the new government’s alcohol policy. I want irresponsible retailers to be shut down, but allowing councils to hit large numbers of licensees (pubs, clubs and shops) with licensing conditions that may have nothing to do with the way they go about their business will hit responsible retailers hard. Removing rights of appeal for these businesses is simply unfair.
While of course much of the above is just special pleading from a lobby group, government-watchers should be reading these signs. When the tensions arose between better regulation, justice, localism, and a tough stance on alcohol, the government felt that the first two principles were expendable. That’s a dangerous precedent to set.
On the other key issues, the jury is still out. Will the government go ahead with the tobacco display ban despite mounting evidence that it won’t tackle youth smoking? Will we see real action to get banks lending again? Maybe a hundred days is too quick to come to judgement, but those who saw a change of government as bringing a chance of fortune for local shops will be hoping for some action to back up their faith.
Weighing in on Alcohol
13 August 2010
At some point I’ll tot up the words I’ve written on different subjects in my blogs, and when I do I reckon alcohol policy will probably top the league of pre-occupations. That’s because it’s a hardy perennial, always in the trade news and often in the national news as Governments change the law on licensing, change local authority powers, clampdown on under age sales, talk about restricting pricing and promotions, and generally lurch from one simplistic solution to another.
It’s also too simplistic of me to call for the holistic, education-based, long-term effort to change attitudes to alcohol, which let’s be honest is never going to happen as comprehensively as we might like. We have to face the facts that further regulation of companies who produce, distribute and sell alcohol is going to be on the agenda for the foreseeable future. The current vogue intervention is minimum pricing.
I don’t want to spend ages on the overall policy debate about minimum pricing, other than to say that we think it’s a pretty blunt instrument to tackle some very complex problems. Of course our members aren’t selling the very cheapest alcohol, so we have less to fear than the major supermarkets with their deals, but I think it’s naive to see minimum pricing as a commercial advantage to our sector when the arguments in favour of a minimum alcohol price are exactly those for higher alcohol taxation. Much better to work with the Government on their efforts to ban below cost selling.
Anyway, we all thought we knew where we were on minimum pricing, with the Health Secretary having made it quite clear that this was off the agenda. Until, that is, David Cameron re-opened the debate by showing “sympathy” with efforts to introduce a local minimum price in Manchester. Because ACS is a politically neutral organisation I won’t be writing a blog about the Prime Minister’s penchant for playing to the local audience – whether in India or Manchester – regardless of the consequences.
It’s one thing having a national minimum price, and if the Government proposed this then we would engage in the debate about how it could work. But a local minimum price would be costly for shops to implement, would lead to artificial competition across different local authority areas, and stop any national pricing or promotional programme. It’s another example of the localism agenda working against local shops.
But as well as the tough talk on alcohol policy and the dogma on localism, the Government came to power with a better regulation agenda, and a commitment to be a liberalising force. I can’t help thinking that if locally-set minimum alcohol pricing was already in place, it would be exactly the sort of regulation that Nick Clegg would we trying to sweep away as part of his programme of evicting bad regulation through means of a public vote.
The Government might be spared the embarrassment of having to be consistent and coherent on minimum pricing if the relevant councils’ legal advice warns them against pursuing this approach. Otherwise, it could come down to Teresa May to decide whether to approve a minimum pricing by-law in Manchester, Middlesbrough or whichever local authority gets there first. I doubt she wants to have to make that decision.
Behind the Hype: Grocery Code Adjudicator
4 August 2010
In May 2008, we saw the end of the Competition Commission's two year inquiry into the grocery market with a recommendation for a grocery ombudsman. Now, finally, we have the Grocery Code Adjudicator, or GCA for short, with powers to investigate complaints made by suppliers - anonymously if necessary - and to act on other public domain information in order to decide whether supermarkets are failing to keep to the Grocery Suppliers Code of Practice (GSCOP). See our press release for more detail and comment, what I want to briefly touch on here is whether local shops should be excited or under-whelmed by this development, and ultimately what this is going to mean for consumers.
If you go back to the original CC inquiry, there was a clear intention to set up a separate body to oversee GSCOP. I think it's disappointing that this hasn't come to pass. The OFT has a pretty mediocre record on grocery market issues, waving through acquisitions that have led to unprecedented consolidation in the grocery market, and specifically allowing Tesco and Sainsburys a clear run into the convenience sector based on the flawed logic that local shops operate in a different market to superstores. Furthermore, the OFT merrily short-handed that the Big Four owning convenience stores would lead to lower prices under a superstore fascia, then stood mute as Tesco continued to run their more expensive One Stop estate (loyal followers of this site know that I have to mention Tesco's wholly-owned convenience store estate with a totally different pricing structure at least once every four blogs, so I'm making sure I keep to my quota here).
So a fail for the Government there - the GCA would have been better as a separate entity. Then you go into the detail of the latest announcement and actually there are reasons to be cheerful. Firstly, anonymity for suppliers gets over the first hurdle of why the old Supermarket Code was so ineffective - the fear factor among suppliers who don't want to grass up their biggest customers. Secondly, the opportunity for the GCA to use other data to pursue cases shows that the Government have listened to our plea for other interested parties to make representations. So it's not been a whitewash - we are facing the prospect of a genuinely effective GCA.
I've been appalled by some of the spin about how damaging an effective GCA will be for consumers. Those positioning themselves as consumer champions (while being paid by supermarkets) should go back to the original CC report. The behaviour that they wanted supermarkets to stop was that which they had found had a detrimental impact on consumers. No supermarket company or their representatives challenged this in the Competition Appeals Tribunal. GSCOP and the GCA wasn't and still isn't about protecting suppliers and smaller retailers, it's about stopping the worst excesses of buying behaviour that ultimately disadvantage consumers.
The costs of the GCA are also tiny in the context of superstore profits. The total cost is estimated at under £3m - less than 0.01% of Tesco's annual profit, never mind the other major grocery companies. The GCA will not pile cost onto shoppers' weekly bills. If GCA works effectively, it will help deliver choice, convenience and value to consumers.
And that's the big "if". Ultimately, all the GCA can do to tackle transgressions of GSCOP is to name and shame the companies involved. For such an important market, that's a very weak sanction. I think we'll be seeing legislation to allow the GCA to impose fines being introduced to Parliament sooner rather than later, which in competition policy terms means maybe in the next three and a quarter years.
Alcohol: Contradictions and Compromises
2 August 2010
Political platforms are all about contradictions and compromises. Within each ruling party (or parties as the case is now) there are competing arguments for and against specific approaches to Government. Therefore, we shouldn’t get too indignant when Government contradicts itself, and we certainly shouldn’t be naïve enough to think that the rhetoric of an election campaign will be matched by every policy decision.
Nowhere are fundamental policy contradictions more sharply brought into focus than on alcohol. Every party has been trying to juggle two competing approaches to regulating in this policy area, but it’s clear to me from the coalition’s latest rant on alcohol – unfortunately included in a consultation document and likely to be translated into law – that the ball labelled “better regulation” has been well and truly dropped.
Quite openly, the Government is proposing a number of measures that are likely to terrify retailers. Firstly, that businesses’ rights of appeal should significantly limited when councils decide to remove or impose conditions on their alcohol licence. So, a Government committed to rolling back the influence (and cost) of the state wants to take away the opportunity for a business to ask a court of law to objectively assess whether the state’s decision to (in some cases) end its livelihood is justified.
OK, but at least councils will be compelled to act on strong evidence before bankrupting small businesses, won’t they? I’m afraid not. The latest proposals would allow for councils to make far more arbitrary rulings than before. In some cases, they will be responding to concerns of residents miles from the premises in question (currently, and rightly, a resident has to be directly affected by a premises’ activity in order to make a complaint stand up). Or, even more conveniently for fans of big government, councils will be able to raise complaints against a licence which will be heard by, er, the council.
Furthermore, a shop may lose, or see restrictions to, its licence despite having done nothing wrong. If the council deem there are too many alcohol outlets in an area, or that an area would benefit from outlets being shut after a certain time or that certain products should be banned, even the best, most responsible retailers will have to grin and bear it regardless of the commercial impact on their business.
Now get this - for the privilege of being subject to the uncertainty of the council’s whim, licensees will have to pay inflated fees. How much more shops will have to pay for their licence is to be decided, but the direction of travel is clear: higher costs, less certainty, less control over whether you get to keep or lose your licence.
Of course I see this through the lens of alcohol retailers, and of course there is a legitimate case for doing more to tackle alcohol harm. And this is the real issue here – none of these measures are proven to actually reduce the harm caused by alcohol. Shut down premises that sell alcohol to kids or to people who are already drunk, stop adults buying alcohol on behalf of children, use banning orders to target problem drinkers, but don’t target responsible premises with more extensive and arbitrary powers for the state.
The Healthy Eating Debate
12 July 2010
Those of you who read the Sunday Telegraph’s story on large pack crisps on sale in local shops (http://bit.ly/aZ1EXH) will have enjoyed my somewhat brutal quote on how shops decide what to stock. Essentially, I said that if consumers buy a product then shops will stock it. Aside from this being absolutely true and a basic fact of retailing, it didn’t really reflect the more complex debate about health choices which we’re pleased to take part in.
I think there is a role for local shops to play in promoting healthy food choices. That’s why we’re partners in Change4Life, and why we’ve been working with the Department of Health to bring fruit and vegetables into shops in deprived areas where access to these products is currently poor. This has led to significant sales uplifts throughout the participating stores, and the qualitative research has shown that improving this offer has enhanced the community value and local perception of the stores. There’s also evidence that better fruit and vegetable availability locally has helped people to make healthier diet choices – that is, they haven’t just bought the same products from different places, but their overall buying patterns have changed.
So clearly local shops can influence consumer behaviour in some way by making choices available and allowing customers to exercise this choice. But that’s very different to dictating what people should or shouldn’t buy, and I’m afraid our scope for changing consumer trends is pretty limited. Perhaps one could argue that a major grocer has the power to fundamentally affect people’s eating habits, but I don’t think anyone really believes that an independent shop is going to reverse a consumer trend.
What we have to do as an industry is get in line with the trends and make sure we’re catering for today’s customer, not those from a generation ago, and so it’s good that these issues have been given another airing. Look at DEFRA’s analysis of food consumption, and you will see many healthier types of food are taking a greater share. As an industry we can’t ignore trends towards healthier choices, and we have to make these choices available. In each of the stores surveyed by the Sunday Telegraph, there was an option for a smaller bag of crisps – whether these were extensive enough is ultimately a question or each individual retailer to consider.
There is already considerable evidence that our industry does range to reflect customer behaviour. Look for example at the soft drinks category. This has changed enormously in the past twenty years. How much water, or low calorie soft drinks, were sold then compared to now? Or look at dairy. Since 1988, the amount of whole milk consumer per person has fallen by 72%, while skimmed milk consumption has risen by 112%. These changes have been driven by education, changing lifestyles and tastes, not by retailers, but because shops keep up with these trends you see a greater proportion of these healthier alternatives on the shelves.
I can absolutely see why if crisp bag sizes are growing that could cause concern, particularly over children’s diets (though there is evidence that these bag sizes are not currently increasing and initiatives liked baked crisps and other reformulation makes this a little more complex). But I don’t see any evidence that choice in this market has been eradicated. What’s needed might be a re-examination of what customers want, but no-one should be advising local shops – nearly 1,000 of which shut down last year – to move away from meeting consumers’ needs.
Cabinet Minister's Comments Relevant to Local Shops
1 July 2010
Ken Clarke's speech on the prison population has grabbed a lot of headlines, not least because many Tory supporters probably thought they were voting for Michael Howard's 1993 "prison works" policy. Of course times change, and it's up to the Government to placate their own grassroots, but this debate is an important and complex one for small shops because thieves and others who make retailers and staff victims of crime must be handled effectively by the justice system. Any review of the prison population and sentencing policy has to take these community businesses into account.
My starting point here is that courts must have the option of sending offenders to prison. That doesn't mean that a first time shop thief should immediately receive a custodial sentence, but magistrates should have the power to use this sanction for persistent thieves. The Sentencing Advisory Panel reviewed this a few years ago and we led the case for the courts to retain this power. I hope we don't have to fight that battle again in the wake of the Justice Secretary's comments.
Our argument then and now is that shop theft is a crime with real victims, and that reducing the penalties for it to (often unpaid) Fixed Penalty Notices is not good enough. The person choosing to commit shop theft should be far more greatly inconvenienced than their victim, and without the option of a custodial sentence I fear that courts would not be able to ensure that this is the case.
That's not to say that prison always works in these cases. That's why we have a justice system that allows for decisions on a case by case basis, and why if interventions like rehabilitation for drugs and alcohol problems (which are usually behind shop crime) or community sentences would make re-offending less likely in that specific case, then the court should pursue this course of action. So long as the courts have the victim's needs high on their agenda, we should support their authority to choose the best approach from the broadest range of options. We have been doing some work with the Magistrates Association to help retailers get their views across to the court, and I hope this helps.
Lansley on Public Health Policy
The other Cabinet Minister making widely reported comments yesterday was the Health Secretary Andrew Lansley. It was his remarks on Jamie Oliver that grabbed the most attention, and for the record I'm not in the (fairly large) anti-Jamie camp in our industry, but I think Mr Lansley's most important comments may have been glossed over. He was saying that when Government intervenes to influence behaviour, this can have unintended consequences, then Government intervenes again to deal with these, which causes further unintended consequences, and so on and so on. At some point policy-makers have to stop and think about what they're trying to achieve, and take a long-term view about the most effective way to deliver this.
I really hope that the Department of Health is going to follow through on this approach in all its policy work. Will they, for example, look again at the issue of tobacco control and consider whether a display ban - for which there is no evidence showing it cuts youth smoking and which definitely has the effect of damaging local shops - is just another example of a poorly targeted intervention? I think this is an area where Mr Lansley's rhetoric needs to be matched by decisive action.
The Buzz Around Mosquito Devices
29 June 2010
We were pleased to see that the Government didn’t bow to pressure to ban mosquito devices outside stores. The bottom line for us is that we’ve heard a few times too many the very real, very disturbing stories about abuse and anti-social behaviour around local shops. The impact on staff can be devastating, and communities can lose their local shop because quite simply the anguish and risk involved in facing up to gangs of (usually) young people is too much to face up to every day. It’s the rights of these retailers and staff that I want to see protected first and foremost. Therefore, we want devices that are proven to have an impact on these problems to be permitted.
So now our position – and my personal views – have been properly established, here’s a retail case against the use of mosquito devices around local shops. Firstly, how many of your customers are under 25? Of course it depends on your location and offer, but if your store is near universities, schools, colleges, public transport centres and basically anywhere except Frinton-on-Sea on a wet Tuesday in November, you will have hundreds of legitimate young customers whose money is as good as the next person’s. Discriminating against these current and future customers is madness.
Secondly, using a mosquito alienates another group of customers – young parents. If there’s one segment of your local population you don’t want to upset, it’s this group. Don’t just think about the sales they account for, think about the chat at the school gates about the local shop and its assault on their kids’ eardrums.
Thirdly, what about your staff? As a sector, we pride ourselves on the job opportunities and training (formal and informal) that we offer to young people. How do you square this with emitting annoying sound frequencies to them whenever they step outside?
Fourthly, what does the decision to use a mosquito say about your business’s approach to crime and anti-social behaviour? I think that stores with mosquitoes look bunkered, defensive and fearful of their community. As I said at the very start of this blog, I 100% appreciate how and why retailers get into this mentality. But I’ve also seen great retailers trading in tough areas and getting their personality, their community ethic and their sales story across by being positive.
Finally, make sure you’re being consistent. If you use a mosquito, you must do everything else you can to tackle crime and anti-social behaviour. That means a partnership with the local police, good physical security, and good staff training. It also means playing your part in tackling one of the biggest causes of anti-social behaviour – alcohol. Get your policies and procedures right, and make sure you’re not a magnet for children trying their luck to get alcohol and tobacco. If you really take this problem seriously, you might find some of your problems killed at source.
If, having considered these points, you think it’s right for your store to use a mosquito device, we will defend your right to do so. At the very least, use them properly and sparingly - targeting the right times to switch them on and the right level to turn them up to. This is too important to get wrong.
Making an Impact in the Community
21 June 2010
A handful of times every year, I get truly inspired by our members' energy and passion for their business and for the whole sector. I'm pleased to say that I'm basking in the buzz of one such event last Friday. We had more than fifty retailers together in Luton as well as local trading standards officers, the police and the local MP Gavin Shuker.
Of course it's nice to have signed up a few new members, but the real benefit came from the great stories we heard and the way that the retailers shared problems and solutions. We heard about community activity, responsible retailing, local lobbying, helping the police, tackling planning applications and many other practical ideas for becoming a better local retailer. These things don't always get the headlines, but they are the issues that make the difference between a retailer struggling against authority and the retailer taking control of his local environment.
That we were able to run such a great event was down largely to the commitment and enthusiasm the retailers, and in particular one of our independent board members Kishor Patel. KIshor is a dynamo, and I swear he has been cloned because I don't see how one person give as much time to ACS, Skillsmart, trade charities, Nisa and his family. Oh, and he happens to be a one of the best convenience retailers in the country. If Kishor can find the time to make his mark in the local community, so can every other retailer.
It's a nice co-incidence that this event took place the day after we announced that our Summit would be held alongside the new National Convenience Show on 1 March 2011. Setting aside all the strategic reasons why we wanted to co-locate with this show, Friday's event in Luton reminded us of the very practical reasons why we want to get as many retailers as possible to Summit11. We know that when retailers get together and share ideas, they can transform their business. Offering the opportunity for retailers to take in a conference specifically designed for them, a trade show featuring their key suppliers, and a fun social and networking programme - all within a 24-hour period - just makes sense.
I hope to see as many retailers as possible at ACS Summit11@National Convenience Show, and / or at the local events we'll be running after the success of Luton. We want to be out there talking to you and helping you.
Sir Terry's Retirement
10 June 2010
Perhaps it’s always been the case, but I can’t help feeling that in Britain we’re ever more inclined as a group to personalise events. Thus this week’s announcement of the retirement of Sir Terry Leahy from the helm at Tesco next March has polarised views into two broad camps:
1. Sir Terry is a business genius who should take personal credit for the success of Tesco, bringing great stores to millions of people and any competing shops that have suffered or closed were simply not working hard enough
2. Sir Terry has the blood of thousands of beautiful little shops on his hands, has caused carnage among farmers and small suppliers, and has gratuitously homogenised our high streets.
Of course the truth is neither of these things. Perhaps having battled with Sir Terry’s Tesco for many years, I’m not best placed to offer an objective analysis of his tenure, but here goes anyway.
My main point is that Sir Terry and Tesco acted rationally to grow shareholder value. They pushed the system as far as it could go, driving the hardest bargains with suppliers and adopting the most aggressive pricing strategies they could, often in very localised ways affecting specific retailers. I think that the impact of these tactics have been hugely negative, not just for our members but for the retail market as a whole, which now has less choice and an unhealthy balance of supply chain power towards the major multiples.
And this is really the second point, Sir Terry created not just today’s Tesco, but today's supermarket landscape as the other major multiples ape Tesco in a (sometimes forlorn) attempt to emulate Tesco’s success. Whatever Tesco did, the others in the big four did just as badly (or well, depending on how you look at it). As a result, we can’t just focus on the 30%-plus market share of Tesco, but on the total market share of the big four grocers – over three-quarters and growing.
So if Tesco and Sir Terry don’t deserve vilification for the closed shops and the bankrupt farmers, who does? Of course it’s my view that the regulators who stood by and let it happen should take the blame. Too many politicians (persuaded by the brilliant lobbyists Sir Terry employed, but surely still grown up enough to make their own mind up on the basis of the evidence) bought the line about Tesco being the beating heart of UK Plc. They became blind to the externalities of the continued exercise of market power by Tesco.
Eventually, when we got the Competition Commission to take a proper look at the market, Tesco and the other superstores were collared for their buying practices and the local market dominance, but we’re still waiting to actually see effective regulation in these areas. It seems that Whitehall’s admiration of Tesco has deep roots.
One Stop - Terry's Secret?
There is however one area where the blindness of regulators has been matched by what I view as bad practice by Tesco. This is in the continued development of their One Stop estate. These stores do not uphold the values that made Sir Terry’s Tesco great, and they don’t even bear the Tesco name, yet they continue to deliver profits. I think it’s wrong that Tesco aren’t more up front in saying that they run several hundred stores that charge much higher prices than the rest of their estate. It’s even more wrong that Tesco communicate the conversion of a One Stop to a Tesco Express as a landmark “Tesco’s Coming to Town” event when in fact it’s just a re-brand.
I hope this messy part of the business doesn’t undermine the legacy of a great business leader, but I think it should be more than just a footnote in the Tesco story. Maybe Sir Terry should address this in his final months in the job.
The Demos Report
7 June 2010
As one the of the major protagonists in the debate on planning over the past decade or so, ACS took particular interest in an article in today’s Guardian in which the think tank Demos has hailed to value of superstores as agents of regeneration. This is a complex debate and one that rarely gets the pulse racing (though it really is very interesting stuff – honest). But in my view it’s absolutely central to the way that Government views local communities, and it strikes right at the heart of the philosophical differences that are at the heart of each of the main political parties.
Demos are representing the view also championed by the likes of Business in the Community over the past few years that attracting a superstore is one of the best ways of regenerating an area, and by implication planning laws ought to allow some wriggle-room for such developments. Of course planning decisions are rightly made locally and it’s not for me to say that any such developments are wrong. However, I think the argument we’re seeing from Demos is far too simplistic.
Firstly, there’s the idea that customers in deprived areas are benefiting from the provision of a new superstore, and that it is these customers for whom the development is intended. In many cases this isn’t true. Some developments turn their backs on the local community (literally, in some cases) and are clearly designed for the middle-class commuters driving past the motorway junctions that these deprived communities just happen to be located alongside.
Secondly, there’s the age old debate about how many jobs a superstore actually brings to an area. If you take away the jobs lost when other local businesses shut down, and when the town centre collapses as a result of out-of-town development, the net effect on jobs is at best limited and at worst actually negative.
I’m absolutely not saying that there shouldn’t be any more superstore developments, or that there can’t be benefits to the community from a superstore arriving. But please let’s not lazily believe that a new superstore is short-hand for sustainable and beneficial development. I hope Demos’s report adds some energy to this important debate.
Queens Speech
25 May 2010
If anyone was in any doubt about the new coalition Government’s desire to regulate more heavily on alcohol, the Queen’s Speech will have made absolutely clear that every stakeholder in this debate – including ACS – is in for a busy time under this administration. It’s hardly surprising, given that Conservative and Liberal Democrat opposition to Labour’s “24-hour drinking” (note: this term is an entirely inaccurate way to short-hand the Licensing Act 2003, but there we go) was so virulent prior to the election.
Let’s start with the stuff we (hopefully) all agree on. Alcohol is a potentially dangerous substance that a too many people abuse, damaging their health and sometimes harming individuals and communities who happen to get in their way. There should be regulation of the sale of this product. Companies who make money from selling alcohol should play a role in making this regulatory framework effective. Every stakeholder in this debate, from consumers, through our members, larger shops, pubs, clubs, manufacturers and anyone else who trades in alcohol, is part of this issue; no-one should be pointing fingers at other parts of the trade hoping to deflect attention from their own issues, or pretending that alcohol-related problems are someone else’s.
Now onto the stuff that there is disagreement about. The new Police and Social Responsibility Bill could be the vehicle for abandoning two important principles that I think could set us on a dangerous road. The first is the end of the principle of targeting individual premises where they are responsible for specific problems. The 2003 Act gives a range of powers to local authorities to restrict hours when alcohol can be sold, to impose conditions on licences, and ultimately to remove licences – but all of these have to be on a premises-by-premises basis.
Critics of the 2003 Act argue that this limits councils’ ability to deal with alcohol-related problems, but I strongly disagree. How is it fair for a business to be hit with conditions that have nothing to do with the way they run their business? Yet that’s exactly what the new Government wants to allow licensing authorities to do through new powers to impose restrictions across a whole area for a number of businesses. This means responsible retailers will be covered by the same blanket as the irresponsible retailers I would love to see shut down.
The second principle is about new outlets being able to get a licence to sell alcohol. I think many of my members would like to see getting a new licence made harder – if you’re the incumbent why would you want more competition? But it’s wrong in my view for potentially good new operators to be blocked from entering the market. Who has and does not have a licence should be a decision based on the quality of that business’s application for a licence, and should specifically focus on their credentials as a responsible retailer.
We’ve seen Governments talk tough on alcohol before, but you get the feeling there is enough political will to see through these changes to the detriment of many local shops. I just hope that at some point in the policy-making process, the relevant Ministers (by which I mean more or less anyone in post at DCOMS, DH or the Home Office) will actually take a moment to read the 2003 Act, to understand the extremely strong sanctions that are available within it, and maybe even to get this Act working better at a local level rather than inventing a whole host of new and poorly targeted regulations.
The Coalition Agreement
20 May 2010
I can confirm that I was not involved in the drafting of the coalition agreement just formally published by the Conservatives and Liberal Democrats. I would like to think that the fact we have met with and communicated with a number of the people has had an influence on this policy platform either directly or indirectly, but there are some parts of it that give us real cause for optimism … if they become a reality.
The first is a point in the Business section that says:
We will seek to ensure a level playing field between small and large retailers by enabling councils to take competition issues into account when drawing up their local plans to shape the direction and type of new retail development.
Wow, just the sort of policy we’ve been pushing for over a number of years. But of course these words can be interpreted in a number of ways. The coalition could be pushing towards an effective implementation of the Competition Commission’s recommendation for ensuring that no one superstore retailer dominates a local market. Or, you could read this as more far-reaching – and more similar to the Liberal Democrats manifesto – by putting the onus on councils to be pro-active in planning for a diverse retail offer. If so, this is really exciting.
And there’s other stuff in the Business section that sounds good and has been largely taken from the Conservative manifesto. Sunset clauses for regulations, a one in, one out approach to new regulations so that the overall regulatory burden doesn’t grow, and more a targeted inspection regime. On the regulation agenda more than any other, it pays to wait to see the details before hailing success, as until every Government department truly buys into these principles, excellent bodies like the Better Regulation Executive will always be fighting the tide. But it’s a start.
There are other areas of the agreement that will doubtless cause us concerns, and frankly I’m writing this a few moments after my first look at it so stand by for my next blog being a rant against the things we don’t agree with in it, but for now, there are reasons for local shops to be hopeful about the coalition’s policy agenda.
ID Checks out of hand? You're out of your mind
13 May 2010
In response to the piece "Got any ID? These checks are out of hand" from the Guardian. The article can be found here: Guardian: Comment is Free
How ridiculous for Josie Appleton to criticise retailers and proof of age schemes for trying to stop under age people from buying alcohol and tobacco. Aside from all the valid health and social reasons why no-one who has any concept of fair and responsible communities would want children to get hold of these products, let’s look at two very simple practical reasons why retailers are absolutely right to have strict policies of asking for proof of age.
Firstly, if a retailer makes a sale to someone under age, they face penalties ranging from a £5,000 fine to a ban on selling tobacco for a number of months, to restrictions on their alcohol licence, to a loss of that alcohol licence or their lottery terminal. To keep this simple, that means that if they don’t ask for proof of age, retailers face a significant risk of their business closing down.
Secondly, if retailers get a reputation locally for being soft on alcohol and tobacco sales, guess what – kids try to buy these products from them. With this comes daily abuse, intimidation and the sorts of problems anyone who had ever been to the estates and neighbourhoods where local shops trade (aka The Real World, see Google Maps on your PC if you would rather stay safely in your office) knows blight those areas. Retailers who stand up to these problems and try to stop children buying these products should be applauded and supported, not vilified as part of some Orwellian plot to make people show ID at every turn.
Proof of age cards are filling a gap left by the absence of an ID card. Of course ID cards attract genuine and polarised views which I respect, but the fact is we don’t have one in the UK, so how else are retailers other businesses who need (as oppose to making an arbitrary choice) to request ID supposed to discharge their duties? All proof of age cards are voluntary, but I’m pleased that they are becoming more popular because more retailers are asking more often for proof of age to avoid falling foul of the law.
I understand how frustrating it must be for groups like The Manifesto Club to no longer have an ID card scheme to attack, but please don’t turn your guns on local shops.
Our Agenda for the Coalition
13 May 2010
Personally, the past week has been just about the most interesting political week I can remember. As many people have said, we all had a sense of living through history. Professionally, the post-election period, and indeed the election campaign, has been a change from our usual workload of policy discussions with Government. In all honesty we wanted to get back into the nitty-gritty, and I’m pleased that we’re now able to focus on our core job of influencing policy.
I suspect that the job of lobbying won’t change as much as some have suggested, and I say that for two reasons. Firstly, while a coalition Government is a new thing for Britain, all of the rhetoric from both the Conservatives and the Liberal Democrats points to this being a coalition built to last a full Parliamentary term. I’m not saying it will last this long, and there will of course be huge tensions (but there are plenty of tensions within a single ruling party, so this isn’t entirely new) but I think we should start from a perspective of this as a coherent Government rather than a fragile coalition like we see in Scotland.
Secondly, the economic issues facing the new Government will focus the mind on finding pragmatic responses rather than entrenching party positions. Of course the political instincts of key members of the Government matter enormously, but ultimately these decision-makers whether they are ex-Labour and SDP men like Vince Cable or his new colleague much further to the right, George Osborne, will be forced to focus on common sense rather than dogma.
Given this, the agenda we’re facing starts to form pretty clearly. We have talked about our agenda as being about pressing the government to Reduce Costs, Tackle Crime and ensure Fair Business. In practical terms, our job starts with getting the new Government to review the tobacco display ban, as the new Health Secretary promised to do while in opposition.
The next set of issues focus on the budget, and in particular we’ll be making the case for tackling bootlegging to bring £4bn of much-needed revenue back into the Treasury through cutting off this huge and damaging market. Then there’s the issue of banks and lending, and getting credit flowing into our sector where good operators want to invest and grow if only they can get the funding to support them. The solutions to both of these issues are complex, but they represent exactly the sort of tough challenge that the new coalition Government is going to have to tackle if it wants to prove its worth to local shops.
Squabbling and Spinning
7 May 2010
Let’s get two excuses in early. Firstly, I’ve slept a handful of hours in the past two nights (Wednesday night was the conclusion of our Summit – on which more elsewhere on the site – where I have a duty to stay up and look after delegates in the bar, and last night I was up all night in front of the election coverage).
Secondly, I don’t know what the result is, and what it really means. That’s because as I write we’re still waiting for 41 seats to declare, and there is still a range of outcomes from the Conservatives being able to form a working Government with the DUP, and this not being possible thus requiring a broader coalition, minority Government or other as yet unspecified concoction.
I can, however, add to the speculation from the perspective of local shops, and I’ll do so on the assumption that we have some form of coalition Government at least in the short-term, and I think the most practical guide to how this might work is our recent experience of the Scottish Parliament and Government. Of course there are many different dynamics affecting those institutions, but there are also some similarities.
We’ve found, from working with our colleagues at the Scottish Grocers Federation, that more radical policy proposals more easily get a foothold on the political agenda. This may be because politicians want to stake out a negotiating position in related (or sometimes unrelated) areas, or because personal hobby-horses can, er, get ridden (?) more easily outside of the constraints of a single party’s policy programme.
This means that ideas like minimum pricing of alcohol, and further restrictions in this category, tobacco licensing and other such interventions have got debate quicker and more seriously than perhaps they would have in Westminster.
However that doesn’t mean that we see these ideas coming to fruition any more quickly or decisively. The hung Scottish Parliament is of course far more likely to block ideas coming from the executive, and this happens repeatedly. There is also a tendency for the Parliament to come to a fudge of a solution, often in the form of handing power to local authorities to address policy areas.
In our experience, this approach is dangerous for businesses who generally value consistency and certainty.
There’s also a concern that in the short-term (which could actually run to a number of months) the business of Government could be neglected. All the time the politicians are squabbling and spinning, local shops are struggling to cope with banks that don’t lend them money, crime in the communities we serve, and costly regulation. As usual, politicians are at their worst when their horizons are limited to the mad world of Westminster, and I hope that they are thinking about communities, families and businesses over the next few days.
New Stores and New Ambitions
30 April 2010
I can confirm that the ACS election campaign trail has not yet led to Rochdale. It has, however, thrown up some great stories as retailers and candidates have met and talked about the issues. Through the visits we've run and the local shop pledges signed by several dozen MPs, I'm pleased that we've made sure local shops are on the agenda for this election.
There are two visits that I've found particularly inspiring for different reasons. The two candidates I've met on these particular visits - Mike Penning and Nigel Mills (no relation to the ACS board member of the same name) - have been engaged and positive, but I really want to focus on the retailers whose stores we visited.
Firstly, Kishor Patel opened his new store in Hemel Hempstead accompanied not just by Mike Penning but more or less every bigwig in the area and the industry. It was, by a distance, the best store launch I've witnessed, and it's worth dwelling on the elements that made it so effective. Firstly, Kishor generated real excitement with the local radio station blaring our music and creating a real sense of expectation around the store. You could see the net curtains twitching in the houses across the road and people drawn to the store out of curiosity or just wanting to be part of what was clearly going to be a great event.
Secondly, Kishor put on some great offers and communicated them very powerfully to his community with leaflets, radio advertising and generating word of mouth. The shop was rammed for a full hour after the official launch time. Thirdly, and most importantly, Kishor and his team simply put together a great store. Every aisle was clean and perfectly merchandised and ranged, the staff were all motivated and professional, and the prices were keen. A cynic might say that this is all well and good on opening day, but I know that if I pop in to the store in a year or so, it will be still be a shining example of great local retailing.
The best thing is that Kishor is the sort of person who will happily share his expertise with any other independent retailer who wants to run a successful launch for a new store, or to re-launch after a re-fit. Kishor doesn't have a secret formula for success, he has a common sense approach and when he does something, he does it really, really well.
Then this week I went to Heanor in Derbyshire to a meet a candidate at a store run by Samir Patel and his family. They had bought the store just four months ago, and it was a busy, valuable local shop. But the exciting thing was that Samir was looking to invest in the store to offer his community even more - an alcohol licence, a cash machine, a re-configured layout to give more space. Samir may be at an earlier stage of his retailing journey to Kishor, but he's got the sort of positive mind-set that gives him every chance of becoming a great retailer. The community already values his store and they are going to love it even more when he is able to put in place everything he wants to for his customers.
Seeing stores and people like this makes our job easy. What politician wouldn't want to support businesses like these? The election campaign is into its last chapter, and perhaps its two defining moments have already happened (the first leaders debate and bigot-gate) but we know there are still many undecided voters from among our membership. After the election, there's still a great chance to get your voice heard with your new MPs, and what better way to do this than to invite them to your store and show them what you offer your community.
I hope to see as many of you as possible at our Summit on 5 May. It promises to be a great event, and if I've learned anything this week, it's to remember to turn off my microphone when I finish my presentation.
- The following blog post was taken from James' comment piece in The Independent on April 21 2010. The piece can be found on the Independent website here: The Independent -
Supermarket regulator would stop the bullying
21 April 2010
It is not at all surprising to see that Tesco has achieved record-breaking profits yet again. For some time the company has been locked into a virtuous circle of profit, allowing continued large-scale investment, even through the recession, leading to further growth and profit.
There are, of course, a range of exceptional retailing practices that contribute to Tesco's success, and competitors – from supermarket chains through to small independent businesses – can and do learn a lot from the retail giant.
The question that those of us outside Tesco must ask is "how big is too big?" Tesco accounts for more than 30 per cent of the grocery market, and the group, and its supporters, tend to answer that question with a shrugged "so what", followed by the mantra that it is customers who decide and if they didn't like Tesco they would not shop there. But there is a point where this loses credibility. In many "Tesco towns", such as Bristol or Inverness, it's not actually that easy to find an alternative.
Tesco's major announcement yesterday was 9,000 new UK jobs, which will receive applause across the spectrum. However, the relationship between supermarkets and jobs is more complex than it might appear in a headline. How many jobs will be permanent and full-time? If that jobs growth is fuelled by building new stores, will it lead to decline in other retail jobs as other shops close down?
Promising new jobs opens doors in a recession. The experience of the past three recessions has been that supermarkets are one of the few developers left once investment dries up. Councils pass proposals that would otherwise face more resistance, and new stores get built, usually just as the economy has begun to recover. Government nationally and locally should insist on smaller-scale, better-located and better-integrated retail developments.
It is time for an effective supermarket regulator, a fact recognised by the three main political parties. This regulator should not prevent Tesco and the others from driving hard bargains and reducing prices but it should prevent bullying and the worst excesses of buyer behaviour that harm suppliers, other competitors and ultimately the consumer.
On The Campaign Trail
16 April 2010
It would be difficult not to refer in this blog to the UK’s first ever leaders debate which marked the next phase of this election campaign. I’ll keep my views on who won and lost to myself, but for me it was amazing TV and a great occasion. Up until 8.30pm on 15 April, the campaign had probably gone roughly as each party was hoping.
The Conservatives got a strong start on their National Insurance Contributions campaign, the Liberal Democrats established Nick Clegg strongly even before the debate, and Labour have got out their key message on securing economic recovery. Each of the manifesto launches went to plan and got sound coverage picking up the themes that each of the parties would have wanted. I suspect that if they are able to step back from the chaos of the campaign trail and view their efforts in terms of professional skill, all of those pulling strings at the top of each campaign will be able to feel satisfied with their work.
For us, there’s also a campaign to run, and clearly retailers’ interests aren’t going to feature too heavily in every set piece. They are, however, related to all sorts of policy issues covered in the campaign, and we have to take this opportunity to make local retailers’ voices heard. We’re also really pleased with the campaign so far. There are a few elements to our campaign strategy that I just want to explain.
Firstly, as probably half the lobby groups in the country have done, we’ve written to candidates to ask for their support for our Local Shop Pledge. In truth this is not a detailed pledge, but it does show that the candidates have an interest in our issues, and we can follow this up with the successful ones after the election. So far we have over fifty pledges signed, which I’m very pleased with.
Secondly, just as for the party leaders, it’s a case of getting out and pressing the flesh. I don’t intend to kiss any babies during the campaign, but my team and I are enjoying getting out to stores to meet candidates. This is really the best way of getting the message across – so they can actually see the stores and understand the issues they face by talking to the retailers themselves.
Of course, it’s this retailer engagement that is the most important strand of the strategy. Now is the best time to get your message across – when the candidates are looking for your vote. Much has been said about honesty in this campaign, and I would guess that this word was used over a dozen times in the first leaders debate. This is equally important when you’re meting a candidate. Tell them the reality of running a local shop – the facts, the good bits, the bad bits. Be honest, and you can really get them to engage rather than just slipping away to the next photo-call as soon as the pictures are taken.
You can keep up to speed with all of the campaign developments through our election centre on this site. It’s changing every day through our analysis of the manifestos and the policy developments, through our own campaign news, or through comment pieces from retailers. There are resources for you to use in the campaign. I would recommend every one of you to visit this part of the site and to make a difference during this campaign.
The Liberal Democrat Manifesto
14 April 2010
Liberal Democrats have a long standing tradition of championing small shops on the issues of competition and role in communities and the manifesto includes pledges to implement a grocery ombudsman the introduction of local competition test in planning and the introduction of fairer approach to parking.
The manifesto spells out a policy change on the National Minimum Wage, pledging to make the same rate payable to everyone over 16. This will concern many stores who benefit from the differential rates for workers under 22.
The manifesto also includes a pledge to reform the way business rates are calculated, moving from a system based on rental values to a system based on the value of sites. They also propose to give greater power to councils to set business rates locally. The Lib Dems also match Conservative proposals to make small business rate relief automatic. Local shops would have to reflect carefully on whether the proposed reform of rates would actually be beneficial to them or not. Site value based assessments in the forecourt sector have seen very high rate bills compared to similar standalone convenience businesses.
The Liberal Democrat pledges on regulation are not that specific, they commit to ‘properly assessing’ the cost and effectiveness of regulations before and after they are introduced. They also refer to an aim to use more ‘sunset clauses’ for regulation (a system whereby new laws have time limits after which they have to be reviewed and reformed of removed if no longer necessary) and also a desire to achieve a ‘one in one out’ approach, similar to the Conservatives’ concept of regulatory budgets.
The manifesto is surprisingly lighter on alcohol regulation than was expected but includes a commitment to ban below cost selling. It does not outright back minimum pricing but states a support for the idea in principle and a commitment to understand the likely impact of the policy. There is no direct mention of licensing reform, although other Liberal Democrat policy documents are pretty strident in their desire for toughening the existing suite of penalties faced by retailers.
Liberal Democrats go one better than the Tories and commit to allowing flexible working for all, and state an ambition to extend parental (maternity) leave to 18 months. There is no mention of plans for the national minimum age.
The Liberal Democrats pledges on tax are designed to be attractive to the low and middle income earner, increasing the income tax threshold for example, but their manifesto is silent on business tax issues like National insurance, corporation tax and VAT. This raises questions about how they would ensure businesses were able to invest and be competitive as the economy recovers.
The Conservative Manifesto
13 April 2010
Local shops can be in no doubt that the Conservatives are staking a great deal of their aspirations for economic recovery on supporting the business sector. The trumpeted plans to reduce the tax on jobs that is national insurance is delivered in full, but there are also pledges to reduce corporation tax, small business rate relief and an ambition to be the most competitive tax regime for businesses in the G20.
I wonder how local shops will react to David Cameron’s invitation to join the Government. There is no doubt that there is passion and energy behind the Conservative plans to restructure the way decisions are made. The Big Society concept runs throughout the manifesto.
There is far less in the way of new burdens for employers than in the Labour manifesto, slightly more generous on flexible working and quite a radical proposal to allow men to share maternity with their partners. Whereas the national minimum wage is a centerpiece of the Labour platform, the Conservatives are silent about the subject. This is a shame because local shops would welcome a more coherent political debate on how the minimum wage fits into job creation and economic recovery. This will probably have to wait until after the election.
We were expecting the tough talk on alcohol licensing and it duly arrived as expected with new powers to refuse and remove alcohol licences, a new tax on ‘antisocial’ drinks and higher fines for underage sales. Many retailers will feel that they will not be helped in the job of preventing underage sales, by the scrapping of plans for a national ID card. The Conservative opposition to the banning of tobacco displays do not make it into the manifesto and reinforces our perception that in the event of a Conservative Government it will be a challenge to ensure that they recognize this as the priority it is.
The Labour Manifesto
12 April 2010
Local shops have a vested interest in economic recovery and are looking closely at party plans for tax and spending. The commitment not to extend the scope of VAT to include new product types is good news for shops as many of the ranges they stock, like food and newspapers, are not currently VAT chargeable. Retailers will, however, still fear a possible increase in the headline VAT rate that could dampen spending.
National Insurance contributions are a political hot potato of the early election campaign and local shops do not favour this increased “tax on jobs”. However, in our sector the high proportion of part time and lower paid entry level work mean that this will damage our sector less than other parts of the economy.
Local shops are impacted by the numerous changes in employment rules and costs that have been a key part of the Labour Government’s record. The manifesto promises more of the same, with extended paid paternity leave for fathers (from 2 to 4 weeks) and a commitment to increase the minimum wage every year to 2015.
Shops will not miss the irony that in one section of the manifesto, the commitment is to cap public sector pay to 1% but in another, it is to inflate private sector wages through a commitment to increase the National Minimum Wage regardless of the economic circumstances.
The interventions on alcohol and tobacco policy have been disruptive and costly to the retail sector in the past 10 years and while there are no new specific commitments, the promise to act where necessary to protect children from tobacco and alcohol harm is an open ended suggestion that we should expect more of the same, instead of the radical overhauls that other parties may be suggesting.
Retailers generally like the concept of restorative justice for criminals, as it suggests that those who commit retail crimes, like shop theft, could face an appropriate sanction rather than none at all. Labour may have to explain a bit more to shops about how these proposals, and the measures on anti-social behavior, will be accessible to community business owners as well as local residents.
Proposals to extend the remit of the Post Office into banking could really help sub-postmasters in our sector; and generally the recognition of the importance of the shops to communities is good to see. The proposal to protect communities from losing shops (and other services likes Pubs) by preventing them from being converted to other planning uses, will be welcomed by some; for other small shop owners a bureaucratic system may prevent them from exiting their business and realizing the value of their business asset at the end of their careers.
Finally ACS has to take some of the credit for the commitment to a Supermarket Regulator, we started the process that has led to this commitment when we secured the Competition Commission Inquiry in 2006 that ultimately recommended this action. Most in our sector would agree that the dominance of the major supermarkets is such that a new independent regulator is the minimum required to ensure that competition works and consumers interests are protected.