Wal-Mart, Tesco, Carrefour et al are often accused of abusing their power. If they’re not exploiting suppliers or operating poor employment practices, they’re forcing smaller retailers out of business and contributing to the eventual demise of the high street and the destruction of the countryside.
But that familiar barrage of media criticism ignores the real story, according to a new report from CIES - The Food Business Forum.
“Food retailers are getting a bad press and the real story that shows the industry is doing a lot of good is not being told,” says CIES chief operating officer, Alan McClay.
CIES commissioned the Oxford Institution of Retail Management (OXIRM) at Templeton College, Oxford University, to conduct a study into the food retailing industry’s contribution to the world’s economy, employment and its impact on society in an attempt to challenge public perception.
McClay says: “The industry has become an easy target for criticism because it has grown very quickly from a local business to a massive multi-national business and it is also very visible - everyone goes shopping every week to put the food on the table.”
In fact the report points out the retail sector is the sixth biggest sector of the world economy and that the top 30 global food retailers account for 10% of the retail market.
He concedes that individual companies in any sector cannot get everything right all the time. “Nevertheless, the overall impact we have is more positive than negative,” he insists.
Retailing is still grappling with the perception that it is an unattractive career choice. Yet the flexible, part-time working that has earned it that poor reputation creates opportunities for population groups who find it difficult to obtain employment, such as students, parents of young children and the over-50s. Similarly, the sector’s ability to train many low-skilled workers makes a big contribution to helping traditional employment blackspots, says the report.
“Obviously some people in supermarkets are on the lower end of the pay scale, but are working conditions any worse on the
shop floor than they are in factories?” asks McClay. “These jobs only get a harder press because they are more visible. If you start talking to workers you find a real passion and community spirit on the shop floor.”
Turning to job creation, McClay says: “Retailers are blamed for destroying jobs but people don’t realise the number of jobs created through the whole chain, with new standards of pay and conditions. The food retailers also help to open up new business opportunities for smaller companies.”
The report highlights the lack of research into the true effects on a community when a large store moves into the neighbourhood. However, the University of Missouri-Colombia has shown that a Wal-Mart store generally adds 100 jobs to the area in the first year of opening. Half are lost over the following five years - mainly from wholesalers and smaller retailers - leaving a net gain of 50 new jobs.
However, the industry’s importance stretches way beyond its economic role and retailers are failing to get the message across, says the report.
There is no single international authoritative source of statistics on general or food retailing and the report’s authors believe that this lack of reliable information could be a major cause of retailing appearing a lesser industry.
This is in stark contrast to the treatment that statisticians give other industries, such as manufacturing.
“People have always seen retail as just an intermediary and not adding value, compared to manufacturers,” explains McClay. “The problem of communicating its importance is exacerbated because the value of retailers is not always tangible.
“In order to convince the public and the relevant authorities to stand up and take notice, we have to have some way of measuring this value.”
And he says that it will take time and an international effort from many different factions of retailing to provide the comprehensive source of data that the report recommends. He does believe, however, that it would prove that food retailers are not necessarily the bad guys.