Supermarket Sweep: Will Tesco be a winner for Aberystwyth?

Tesco

Photo – Tomos Nolan

IF YOU happen to have been hiding away from the typical ‘Aber’ weather we’ve been having these past few weeks, you may not have heard the news – Tesco has officially opened in Aberystwyth! Personally the excitement hit when Tesco began delivering from online orders, meaning better deals were available on big shops than have been available at Morrisons. Surprisingly, Morrisons haven’t capitalized on the abundance of students by offering deliveries themselves. For some time we’ve been lacking a huge conglomerate presence in the way of supermarkets, and as it ranked Fortune magazine’s world’s most admired food retailer in 2007 Tesco was surely a good choice. As Spar, Co-op, Morrisons and Lidl begin to get tiring and prices rise in the former three, the presence of Tesco is ever more appealing to a community that wishes to save money.

Tesco, as such a large company itself, currently has only a small presence in our town; is this new store too small to make a viable difference to our purses? Much like the superstition that elephants are afraid of mice, it appears that Morrisons may be edging into a corner at the appearance of even a little Tesco Express. More than ever deals can be seen appearing in the aisles of Morrisons in the hope that customers will not defect. Bids to increase return custom can also be seen in the center of town – since the start of September saw a new influx of freshers arriving, 24 hour Spar introduced its 5% student discount. Not a huge difference but it’s something. Additionally, Spar is already open 24/7 and picks up a lot of trade from the nightlife of Aber. It is unlikely that Tesco Express could not provide adequate competition for Spar during the night due to the opening hours (although we all wish it could). Perhaps it will instead provide more competition for The Co-operative due to its central location. The Co-op, which is out of the way for many students, boasts inflated prices despite the quality of the products and the 10% NUS discount available.

One view floating around campus is that Tesco should have invested in speeding up the larger superstore suggested for arrival in December 2016; although its development seems slower than Arriva’s service to Shrewsbury for the time being. Bringing the larger store to town will create more of a basis of competition for all of the food outlets in town, hopefully introducing more competitive pricing. Alternatively however, it has been suggested that opening a smaller Express store is the smarter move as it will allow their local customer base to solidify through favoritism of products and fresh customer service. Getting people talking and hooked on their cheaper Tesco brand products is an often used marketing strategy to create a buzz in the community before the larger store arrives – therefore ensuring large numbers immediately through the doors. Is it possible that Tesco is trying to prove that they can takeover yet another small town with such a saturated market. After all, the Tesco superstore will be competing with the food section in Marks & Spencer when it is built alongside it, as well as Morrisons. However even the larger store could be doomed to failure, as Tesco has been losing market share to discounters such as Lidl and Aldi, as well as consumers who wish to do ‘top up shops’ at smaller convenience stores rather than store a fortnight’s shopping.

Support from the community will be needed if it is to avoid a backlash. Local sentiment towards smaller businesses and store owners is increasingly strong in such a small town as Aberystwyth, making the fact that unlike the arrival of Starbucks (where signs appeared in local cafés prompting people to say no to Starbucks) there has been very little viable backlash from the local community in the form of protests or signs towards this smaller Tesco quite unusual. Perhaps this is due to the creation of several new jobs, or because the smaller store will make very little difference in an already saturated market.

Recently investigations into Tesco have feature across many tabloids these past weeks. For example, the Metro states that:

“Tesco has formally been placed under criminal investigation by the Serious Fraud Office (SFO) following its discovery of a £263 million hole in profit expectations.”

Tesco, who have experienced great success as a business, now seems to be failing rapidly; will its addition to Aberystwyth be floppier than the free erections their new cash-point has been promising? As of the 24th October their share price was down to 170p (having been above 370p a year earlier) and its market capitalization sitting around 14bn (with Aldi around 150bn). Although the company continues to make a profit, it is minute compared to what was seen in years previously – sometime soon the company will implode from the large tax scandal and fold. Is this really the company we want investing in our town? Although Tesco has been set to make a large impact in Aberystwyth, the little Tesco Express store will be just a penny in a pint glass – making very little impact due to its size. The smaller stores across the UK are unable to offer the cheaper deals like the supermarkets and so it will be unable to make much of a difference to consumers habits, especially since Lidl already offers cheaper groceries and meat at a decent quality.