'Big four' supermarkets under fire over planning power
- 22 December 2010
- From the section England
Whether it is building a large retail park or a small high street store, the so-called 'big four' supermarkets are finding an ever increasing number of ways to expand their empires.
Branded as "aggressive" by some councillors, the power the big four - Tesco, Asda, Sainsbury's and Morrisons - hold over local authority planning has raised concern in some places.
At least 577 stores were approved by councils in the UK in the two years to 1 November, according to research carried out by the BBC.
Campaign group Tescopoly, which opposes the growing power of the major supermarkets, has accused the supermarkets of throwing money at the planning process until they "get their way".
But supermarkets say they take care to identify the right sites to build new stores and work with councils to ensure their developments benefit the community, and in some areas offer regeneration opportunities.
A Tescopoly spokeswoman said: "When a new store is turned down, supermarkets often appeal, return with new applications or throw money at the planning process until they get their way - and their new shop - regardless of the wishes of local people."
In Ilkley, West Yorkshire, councillors voted unanimously to refuse a planning application for a Tesco superstore following concerns about traffic problems, transport and the effect on other traders.
But that decision by Bradford Council was overruled by the Planning Inspectorate in September after Tesco appealed.
Ilkley councillor Martin Smith, who fought against the proposal and was at the eight-day appeal hearing, claims the council had only one lawyer and two or three experts while Tesco had significantly more.
"They had a full brigade of consultants," he said.
"All they are interested in is not a service to customers but a service to their balance sheet.
"They have become far too powerful hence we do not have a variety of shops.
"People are afraid of taking these people on. They just bamboozle people."
Councillor Chris Greaves, who was chairman of Bradford Council's planning committee at the time, described Tesco's behaviour as "aggressive".
"They put forward an incredible case, threw shed loads of money at it," he said.
"It's extremely frustrating. There is a lack of local knowledge and the amount Tesco threw at it is phenomenal."
He said he had not shopped in a Tesco since the planning decision was overruled and urged anyone not happy with what had happened to do the same.
"Everybody in Ilkley has a choice and that's just do not use it, boycott it," he said.
The report from the Planning Inspectorate concluded the superstore would enhance the town and create much-needed jobs.
Tesco said it had consulted with the local community who it said supported the development.
A spokesperson said: "We are delighted to have been granted planning permission for a new store in Ilkley.
"This will create dozens of new jobs for local people and will bring great value and convenient shopping to the area.
"Local people, through public consultation, have told us they support our plans. That is why we want to build this store; because we are confident it will be busy and popular with local people."
For many councils, particularly in deprived areas, the involvement of the big supermarkets is seen as a vital part of regeneration.
Tesco is building a £200m complex in West Bromwich, West Midlands, which includes a retail park, new school and a police station.
The development has taken a huge amount of negotiation between Tesco and Sandwell Council and has been 10 years in the making.
The school has already opened but phase one of the retail development will open in 2012.
Councillor Ian Jones, Sandwell Council's cabinet member for jobs and economy, said the authority had a good relationship with Tesco and without it, West Bromwich would not have got the regeneration it desperately needed because the council could not afford it.
"Tesco are the biggest builders in the country," he said. "The development they are bringing to us is something we have wanted.
"This is a £200m investment. What we have got is a brand new school, brand new realignment of roads, 20 to 30 new shopping experiences, a cinema - that's what West Bromwich has been crying out for.
"We are fortunate that we have been able to capture Tesco's enthusiasm to deliver a whole solution process."
In many cases where permission has been granted to build a new store, a sum of money will be paid to the local authority by the supermarket chain to spend on community facilities through a planning arrangement known as a section 106 agreement.
Tescopoly describes the agreements as "sweeteners" but planning law expert Claire Dutch, a partner at Hogan Lovells legal practice, said it was more complicated than just "bunging the council some money".
She said there were strict rules in place to ensure the money was spent on facilities related to the supermarket.
"The agreement documents what the council requires in order to make the development acceptable," she said.
"The council cannot just ask for anything it wants unrelated to the development.
"Generally, local authorities have become more savvy at requesting more things to be provided by the developer.
"Local authorities are under pressure to push the developer hard to provide a multiple of things because they are strapped for cash."
Leeds City Council is currently negotiating an agreement with Asda to give just over £1m towards public transport and the relocating of a medical technology company to its proposed new site in Middleton.
In Colchester, Essex, up to 243 new jobs were offered to unemployed people by Sainsbury's before a store opened as part of a section 106 agreement designed to help deal with the large number of people out of work.
Whether it is a large or small store, the race is on for the supermarkets to find new locations to expand their business.
One area all four supermarket chains are expanding is the smaller convenience stores, particularly those on the high street.
Such stores often do not require full planning permission and are therefore easier to build.
Natalie Berg, global research director for Planet Retail, a retail analysis firm, said the supermarkets had huge plans to increase square footage further and opening smaller stores was a favourable option.
"It's becoming increasingly difficult to get planning permission to open these larger stores and they need to continue growing," she said.
"The market is saturated and there is not really room for these bigger stores and they are getting met with opposition.
"They [the supermarkets] are focusing their efforts online and through these smaller stores."