FPB hits back at Tesco over ‘King Kong’ row
A furious row is breaking out between Tesco and the FPB over claims the supermarket giant has become the ‘King Kong’ of the high street.
Tesco is taking umbrage at being compared to King Kong and labelled too greedy, too powerful and too dominant by the Forum of Private Business (FPB) after it announced record sales in the Christmas and new year period, outstripping its rivals.
Talking to the North West Evening Mail in Barrow, Tesco media spokesman Richard Anderson said: “We completely refute what the FPB is saying about us being King Kong. Tesco customers like us because we give them what they want in a completely transparent way. Everyone knows what Tesco is about.”
Then, speaking to the Lea Valley Star, Mr Anderson refuted the FPB’s fears that Tesco could grab up to 45% of the grocery market, from its present share of a third, if it develops its landbank of 185 development sites.
“The FPB seems to have counted every piece of land we hold, but by no means could we build a store on every piece. Tesco is up there to be shot at and we expect to be shot at. We do not expect everyone to love Tesco but do hope it is done on a factual basis. If the Competition Commission does decide to launch an inquiry we will welcome it and be as helpful as we can be. We feel we are treating suppliers fairly and that the competition we provide is good for the consumer.”
But the FPB said it stuck to its guns, saying fears of Tesco’s market share rocketing had been widely quoted by retail analysts and Sainsbury’s boss Justin King. “Perhaps Tesco’s chief Terry Leahy can come clean about what portion of the UK grocery market Tesco aims to have if it develops its landbank,” demanded the FPB’s Chief Executive Nick Goulding. “We know Tesco’s growth has been remorseless in the last five years. The number of Tesco Extras – the hypermarkets – alone has rocketed to 100 from 21 in 2001. Tesco’s desire and greed to grow is insatiable.”
Mr Goulding said Tesco is trying to pour cold water on reports that it is growing too big because it feels under threat.
“The Office of Fair Trading is considering right now whether to order a Competition Commission inquiry into the growth of the supermarkets,” he said. “And Terry Leahy knows all too well that if an inquiry is ordered it will bring Tesco’s behaviour under the microscope like never before. Its intimidation of suppliers, its abuse of the planning system, its anti-competitive practices, all of which are adding to the demise of the British high street. This is all part of what Tesco is ‘about’. And contrary to what Mr Anderson says, this behaviour is not transparent and there is widespread ignorance of how ruthless Tesco’s methods are.
“Bluntly, Tesco is afraid a Competition Commission inquiry would expose these unpalatable truths and thus jeopardise its plans to seize up to 45% of the grocery market. This is why Tesco is playing down its landbank and potential to grow.”
Mr Goulding said it should not be forgotten that last November, at the All-party Small Shops Group hearing into the state of the high street – which is expected to publish its report this month calling for a inquiry into supermarket dominance – Tesco admitted it is aiming to double the number of Tesco Express convenience stores in the next 10 years.
“There is now an irrefutable case for an inquiry into the supermarket sector,” he said. “Tesco has a clear aim – to keep growing. Look at Inverness where it has more than 50 per cent of grocery share. This is the frightening reality of Tesco’s monstrous ambitions. It is high time Tesco was examined, challenged and its practices exposed to the public.”
