Figures for a Tesco just don’t stack up
- Credit: Archant
SO Tesco wants to spend millions building a superstore that will only generate 60% of the takings it would normally expect.
In addition, a large proportion of that customer spending will come from two of its other stores – Tesco in Felixstowe town centre and at Martlesham Heath.
Bizarre, or what?
Of course, campaigners will point out that the supermarket giant will still make millions of pounds profit every year – but at what cost to the other shops in our community?
There is not £19million extra – the turnover expected – waiting in our pockets to be spent every year. Each family has one weekly sum to spend on food and so other stores are bound to suffer.
Of the takings, £10m would come from edge of Ipswich stores, most, probably, from people not having to travel to Martlesham any more.
According to Tesco’s calculations, the new Walton Green store will deprive the town centre of at least £4m a year – £1.7m of that from its own Tesco Metro. The Co-op would lose £1.6m and Marks and Spencer and Iceland £750,000. Morrisons would lose £4m a year.
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Tesco reckons the losses would not be enough to kill any of these stores.
Do we believe that? Do we believe this store will only take 60% of what Tesco expects a store of this size to make every year? What if it makes 80 or 90% of what it should, or even 100% or more? What would be the impact then on Co-op or Morrisons.
There is no new money for this store – its takings will simply be a redistribution of everyone else’s.
Tesco’s assertion is that its superstore will claw back trade to Felixstowe – but that only works if that trade doesn’t end up in Tesco’s coffers. It has to benefit the town and other businesses, too.
The company says its store will not carry a big range of non-food items so people not wanting the burden of travelling will shop at Walton Green and then buy the rest of their shopping in Hamilton Road.
Rubbish. Why would anyone do that? If you are used to doing one trip to shop and then suddenly discover cannot get everything you need, you will not want to take home your shopping to put in the fridge and freezer and then mess about making another trip into town for the remainder, finding somewhere to park, mooching from shop to shop.
People who expect to buy everything in one place will simply drive past Walton Green and carry on going out of town to their usual store.
It’s all highly complex – and most of it is guesswork. It’s the only data available and the planners have to use it to decide if this development gets the go-ahead or not.