|ACS chief slams Sir Terry Leahy's high street claims|
|Written by Richard Siddle|
|Tuesday, 05 February 2013 12:22|
Former Tesco chief executive Sir Terry Leahy's comments on this weeks' BBC Radio 4's Desert Island Discs that some high streets are "medieval" has brought a strong reaction from the small retail groups.
James Lowman, chief executive of the Association of Convenience Stores, labelled Sir Terry as simply being "wrong" in his assertion that it was shopper behaviour rather than the growth in supermarkets per se that was the result of more stores closing on UK high streets.
In the Radio 4 programme broadcast on Sunday morning, Sir Terry responded to interviewer Kirsty Young's question about whether seeing boarded-up shops made him sad, by saying: "It does but it is part of progress. People are not made to shop in supermarkets, they choose to shop there."
He went on to say that some high streets "are medieval and the way that we live our lives now is very different". That meant, he added, "you have to make sure the benefits outweigh the costs, and I think that they do".
Sir Terry, who left Tesco in 2011, said people were increasingly shopping in supermarkets because that was their preferred way to shop.
But, in a strongly worded reply, Lowman said: "There are two issues to take up here: tone and substance. The tone of Sir Terry's comments was too brutal and Darwinian. Our members are entrepreneurs; they understand competition, risk and the tooth-and-claw battle for consumer spend, and they don't need someone who has made his fortune managing other peoples' investment in a PLC, rather than risking his own capital, to teach them market economics.
"Yet whether you see it as 'progress' or not, properly functioning markets do see business failures, so while the media reaction has centred on these perhaps unwisely chosen words, it's not this that particularly concerns me.
"My issue is this: Sir Terry's analysis is wrong. He spent years building more and more out-of-town sheds, ripping the heart out of town centres. Yet today, many consumers don't want these out-of-town sheds. Every piece of market data shows that consumers want to shop little and often in high streets and convenience stores, and they want to shop online.
"Blustering about small retailers not keeping up with consumer trends hides a more inconvenient truth for Sir Terry – the sheds he built are becoming obsolete as well as soulless and depressing.
"What makes Sir Terry's comments baffling, therefore, is that he was one of the first to recognise this trend away from out-of-town locations, and he wisely invested shareholders' money in an estate of Tesco convenience stores that now stands at around 2,000 (including One Stop). He recognises, and has backed with hard cash, the notion of perpetual out-of-town dominance is nonsense.
"So why does all this matter beyond a spat about comments made on Desert Island Discs? It's because there is a powerful big business lobby peddling an argument built on the fallacy articulated by Sir Terry. They argue that town centre first planning laws, progressive business rates policies and the now-established Grocery Ombudsman are government interventions that go against the way consumers are voting with their feet.
"I'm up for a proper debate about all of these things, but this needs to be on the basis of the facts.
"That's why I think that Sir Terry stating – as fact – that consumers are favouring large stores when in fact they are not is more significant than just tough talk and posturing. It's fundamentally misleading and potentially damaging for small stores and high streets."