Press Release by the National Association of Master Bakers
This is a transcript of the evidence given by David Smith, Chief Executive of the NAMB to the Parliamentary All Party Small Shops Group Enquiry.
"The Nations High Streets in 2015" - view report
Good Morning, My name is David Smith. I am here as the Chairman of the Independent Retailers Confederation and the Chief Executive of the National Association of Master Bakers. As chair of the IRC I speak for twelve Trade Associations which represent the independent retail sector with over 100,000 shops. As CEO of the Bakers Association I represent around 10,000 baker’s shops and 3000 business.
Why small shops, and why is this enquiry so important. Well small shops are special and they are under threat. They are special because they are a real part of the community, your constituency, in a way the national multiples can never be.
Every year every political party has agreed that small shops and small businesses are the lifeblood of this country. Turning that thought into real help from government has proved difficult, and the rise of the supermarkets at the expense of small shops has being seemingly unstoppable.
New legislation weighs much more heavily on small shopkeepers. They have to cope with inspections by Environmental Health and Trading Standards, VAT, PAYE , Rating Officials, Immigration, Water Board and Fire officers. They have to understand all the legislation, and how it affects them, which these officials enforce. The enforcers themselves often misinterpret their own legislation. They cannot, we are told, be expected to know the specific detail of how a particular clause applies in sector specific cases. But independent retailers have too. So inspectors over enforce to protect their own jobs. Pity the shopkeepers struggling to keep abreast with legislation. I would not go into business today; I couldn't read the new legislation fast enough.
Legislation actually helps the multiples compete.
They see increased legislation as a business advantage.
They can employ the necessary specialists. They can use the home authority principle. They are assumed by the enforcers to be squeaky clean, but at individual store level mistakes can and do happen.
Because of their higher net profits they can absorb the extra costs and use this advantage to price independent small shops out of business.
Below cost selling, Predatory Pricing, the unfair use of their power by this “complex monopoly”, The OFT’s own phrase, is driving small retailers of all kinds out of business. This has a real detrimental effect on your constituencies.
When a supermarket opens, in an out of town shed or as a "local" your community loses. They talk about job creation; they do not talk about the job losses they will create in other business. The store does not use your local electrician refrigeration engineer and plumber; it buys its vehicles centrally so your local garage suffers. The manager is parachuted in, stays a couple of years and then is gone. No one serving on the town council, no parent governor and no secretary of the local football team. Profits generated in the store go to a distant head office. The energy and the profits which locally owned shops put into their communities are lost. Small shops are often food shops; the local food producers will find it easier to put their products on their shelves. Butchers, Bakers, corner shops and green grocers buy locally when they can, they use local wholesalers. More local profit returning to the communities in which it is earned.
Small shops rely on each other, when one of a shopping parade becomes unprofitable and closes then the whole of the parade can become vulnerable.
I would ask you next time you walk along the shopping areas of your constituency to look hard at who occupies the shops. Many of the owners will be thinking of retirement, and who will take over when they retire? How many shops are actually making real profits? See how many charity shops there are. A vibrant viable high street adds to the rateable income of your towns. Boarded up fly posted shops bring down the whole community.
The multiple retailers had to happen. Social and business changes have made that inevitable. Efficiencies of scale work for other areas of business, so why not retailing? However there is a political question here.
If market forces are to be allowed to continue unchanged, then in the not too distant future a government will be faced with the real prospect of dealing with two enormous international companies. One based in the UK and the other in the states. They will control the distribution of everything. Not just food but white and brown goods. Petrol, Cars furniture and prescriptions. They will employ the chemists, the dentists. The insurance and financial providers will be so tied to them, as suppliers, they too will lose their independence. All their suppliers will be in their thrall. Woe betides any manufacturer or provider who does not toe their line.
Governments will be negotiating with them to put government policies into affect. For a current example study how the Food Standards Authority is struggling with healthy eating labeling.
The Independent Retailers Federation is fully behind this All Party Small Shops Parliamentary Enquiry. We hope your report will change the way legislators, both in Brussels, Whitehall and in the local authorities look at small shops and recognize their importance to communities.
In answer to the question from the Committee of what action could government take to redress the balance?
David Smith said that it was the duty of Local Authorities to make access to shopping easy and pleasant. There should be free
time-limited shopper parking and Town wide parking with token schemes to enable customers to reclaim their parking charges.
Planning decisions should at made at local level, so no planning permission by appeal. Also, planners should be able to take existing shopping provision into account.
Editors Note.
The Independent Retailers Confederation is a grouping of Trade Associations representing the independent retail sector. David Smith is the CEO of the National Association of Master Bakers.
The All Party Small Shops Group of MP’s is supported by the IRC.
Further details from Quintus Communications 020 7976 1580 or
David Smith on 078 8543 4638
dsmith@masterbakers.co.uk
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