Sir; Congratulations to Tesco on a record £2bn+ annual profit. As an independent convenience store retailer, I note with interest that part of its increased profits come from ‘services’, an area in which I feel the independent trader is being severely disadvantaged.
We offer customers the ability to pay utility bills through a terminal provided by PayPoint.This service is not available from any of the major multiples, probably because it does not make money. My complaint is the ridiculous commission that we receive for operating this service.
As an example, our Westway store last week handled £4,375 and received a commission of just £10 (0.23%). The same applies to electricity vouchers - on a turnover of £3,541 our commission was £12 (0.34%). These payments do not even cover the labour costs associated with this service, or bank charges. The consumer does not pay any charge.
Tesco operates a Tesco Express and a Tesco Extra both within a few minutes of our store and neither of these stores offers the services that I have described. I have a great respect for the achievements of Sir Terry Leahy and I note his reference to “free market forces” as a reason for success.
Unfortunately, it would appear that it is the small independent trader who is providing the “free” element to the local community.