August 2, 2007
Contact:
Diana Buckhantz, 323-934-0443, 213-591-1681
Amanda Shaffer, 323- 259-2759, cell
626-818-2348
REPORT ANALYZES GLOBAL FOOD RETAIL GIANT AS IT LANDS
IN U.S.
Report Details Tesco’s Promises,
Policies, and Past Performance
Consumers, community residents, and policymakers need to question and
hold accountable promises made by British food giant Tesco as it
prepares to enter the U.S. market, according to a new report, Shopping for a Market, by the
Occidental College Urban & Environmental Policy Institute released
today.
Consumers, community residents, and policymakers need to question and hold accountable promises made by British food giant Tesco as it prepares to enter the U.S. market, according to a new analysis by the Occidental College Urban & Environmental Policy Institute released today.
With plans to open more than 100 stores during the next year under the name Fresh & Easy Neighborhood Markets in California, Arizona and Nevada, Tesco intends to replicate its dominant presence in the United Kingdom, where it commands a 31% share of the grocery industry, according to the report. Tesco’s arrival in the United States has the potential to significantly influence the direction of the U.S. grocery business in such areas as labor, environment, health and the food system, the report says.
“Tesco has been especially adept at marketing itself as a socially responsible corporation,” said Robert Gottlieb, Henry R. Luce Professor of Urban & Environmental Policy. “However, our examination of Tesco’s track record shows significant gaps between what it has promised and how it has achieved its current position as one of the top multinational operations.”
“Tesco’s move across the Atlantic comes at a moment when issues of food access in low-income communities, widening income gaps, environmental concerns, and changing demographics are all on the front burner,” continued Gottlieb. “We are releasing this report before Tesco’s rollout because we want to provide a comprehensive picture of how the company operates in the 12 countries where it has set up shop and its plans for the U.S..”
Key findings in the report include:
Global Position: Tesco is a sophisticated and successful corporation with strong marketing savvy. Tesco has quickly expanded to become the third largest global retailer and now challenges Wal-Mart as the most aggressive and dominant food retailer in many of the places it operates.
Food Access: Tesco has highlighted its commitment to increasing fresh food in low-income communities by promising to locate stores in underserved areas. The report finds that 10 of the first 98 Fresh & Easy sites in California, Arizona, and Nevada can be considered low-income, high poverty areas. Of those, only one store is located in an urban area that does not have another full-service grocery store. In some counties, such as Clark County in Nevada, none of the stores are in high poverty neighborhoods. Overall, more than half of the Fresh & Easy sites are in neighborhoods where the median income is higher than average.
Workplace Issues: While Tesco has promised that its U.S. stores will be a “great place to work,” the company has decided to rely on part-time rather than full-time employees. This limits the ability of workers to achieve a living wage without having to juggle multiple jobs. Tesco executives say they are not currently considering engaging in discussions with local unions — although they tout a model partnership with the union that represents their store workers in the U.K.
Health & Environmental Concerns: While Tesco has promoted its environmental and health-related profile, it plans to duplicate only some of its U.K. initiatives in this area. For example, it has no plans to develop a local food sourcing approach nor eliminate genetically modified food for its house brands.
Supply Chain Issues: Tesco has a global supply chain that involves thousands of suppliers and subcontractors. Tesco exerts tremendous pressure over its suppliers to maximize cost savings and production flexibility. When supply chain abuses are documented, Tesco says that it tries to respond, but adds that it is difficult to monitor all the activities of its suppliers and subcontractors.
The report concludes that Tesco’s U.S. operations will utilize what Tesco has relied upon in its U.K. operations: a strong marketing capacity and a powerful influence over numerous groups from city councils to farmers and suppliers. The report presents a series of recommendations for how Tesco can operate responsibly in its stores and supply chains.
“As it seeks to become one of the biggest, if not the biggest, grocery chain in the United States, Tesco needs to be held accountable for its actions” said Amanda Shaffer, the report’s lead author. “We have identified opportunities for policymakers and community, labor and environmental groups to establish standards for Tesco and all supermarket chains. Tesco can choose to take the high road of healthy food access, quality jobs, and environmental change or the low road of its main competitor Wal-Mart.”
The report is available on the UEPI website at www.uepi.oxy.edu
The Urban & Environmental Policy Institute (UEPI) is a
community oriented research and advocacy organization based at Occidental
College in Los Angeles, CA. UEPI serves as the umbrella for a variety of
affiliated programs addressing work and industry, food and nutrition, housing,
transportation, regional and community development, land use, and urban
environmental issues.
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August 9, 2007 at 5:11 pm |
This is such an important issue. Facing Goliath:
Challenging the Impacts of Supermarket Consolidation on
our Local Economies, Communities, and Food Security is another great article. It discusses the consequences of grocery store consolidation on the eniorment, labor rights, price control, food safety, and consolidation of wealth. Keep up the good work!
August 11, 2007 at 4:17 pm |
Not to discount your high ideals, but expecting Tesco to support neighborhood purchases of fresh produce and such will be quite a trick in Las Vegas where we grow more rocks than anything else. Being a desert, it’s sort of difficult to grow much lettuce or fresh vegetables. Even sending a flock of free range chickens out in the wild is a bit of a trick, since they don’t do well in 115-degree temperatures. Are you mainly upset that the employees won’t be Union members, like at Wal-Mart? I think that might be the real agenda here.
August 11, 2007 at 5:27 pm |
I have to agree that your report seems to fault Tesco for not utilizing the Unions. What’s interesting about that is that if you look at the wage of unionized supermarket employees and the attitudes they have about their work environment, vs. the attitudes of employees at large chains that are not unionized (such as Costco and Trader Joes), there’s a huge a difference. People don’t like working for Ralphs or Vons, but they LOVE working for Costco and TJ’s. Furthermore, the employees at Trader Joes and Costco not only recieve better benefits, but higher wages. Did you know a Costco checker will make over 40k a year, plus a lucrative retirement plan and full benefits? None of the union houses offer that, plus the members have to pay dues, which serve to line the pockets of the morons that run the UFCW. Can you really fault Tesco for adopting the more sensible approach of TJ’s and Costco? I think not.