Economic Cleansing

Wal-Mart’s arrival in Britain will be the final blow for small shops

By George Monbiot. Published in the Guardian 17th June 1999.

You could be forgiven for believing that the Messiah had got his dates mixed up, and booked his resurrection in Britain six months before the Millennium. “A champion could be about to arrive”, the Daily Mail tells us, which will bring “a better life for all”: its coming will be “as welcome as rain in the desert”. A new “heaven” awaits us, says the Times: we will be “lifted to a higher plane”. Such expectations are seldom associated with one of the most ruthless corporations on earth.

It is true that Wal-Mart will do what the Office of Fair Trading has long been incapable of doing, and force the other superstores to bring down their prices. Its staggering buying power, its ability to find the cheapest resources anywhere on earth, will mean that British consumers will pay less for their groceries than they have ever done before. But in the hope of restraining our indigenous ogres, we have opened the door to the Leviathan. In years to come, we will look back with longing to the days when our own retailers exploited us.

The new shopping space Wal-Mart opened last year is bigger than the total holdings of Tesco, Sainsbury, Safeway and Asda put together. Its global sales in 1998 equated to one tenth of Britain’s entire economic output. Its biggest stores in the US stock ten times as many items as the biggest supermarkets in Britain. Wal-Mart specialises in sucking the whole world into its aisles.

Its political power matches its size. From Conneticut to Washington State, American towns have waged ferocious battles against the company’s attempts to swallow their economies. Some have been won, most have been lost, as local authorities, state and federal governments bend to the company’s formidable will.

Long before Wal-Mart made its bid for Asda, it recognised that in Britain, just as in the US, market success depends on political influence. In March, company executives paid a “courtesy call” to Tony Blair. We don’t know what they discussed, for Number 10, in keeping with its commitment to open government, won’t tell us. But you’d win no prizes for guessing that one of the topics was planning.

All over the world, Wal-Mart operates almost exclusively out of town. Its success is contingent upon its size; it stocks more by building bigger, and that means building on virgin land. It will want to pursue the same strategy over here, but, as it knows already, out-of-town construction is supposed to have come to an end in Britain.

Since 1996, British planning regulations have sought to confine the superstores to town centres. In opposition, Labour assured retailers that it would try to do something about this. Shortly after taking office, Tony Blair mused that “certain elements of the development of out-of-town shopping centres … really accord with what people want to do.” Last year, after sustained lobbying by Tesco and the British Retail Consortium, he abandoned John Prescott’s plans for a tax on out-of-town parking spaces. For months, the Office of Fair Trading has been rumbling about removing the restrictions on out-of-town development, in order to stimulate competition. (It seems to have forgotten that planners cannot discriminate on the basis of an applicant’s identity: pulling down the barriers will merely enable existing businesses to grow even bigger.)

It is hard to believe that Wal-Mart would want to move to Britain if Tony Blair had told it that our planning restrictions were non-negotiable. It knows that its lobbying power exceeds that of all our native superstores combined, despite their liberal representation in government. Wal-Mart appears to have calculated that it can change the law.

Blair’s cabinet colleagues know precisely what this means. “What generates traffic?”, John Prescott once asked. “The answer is planning decisions.” If the out-of-town moratorium goes, so do his hopes of an integrated transport strategy for Britain.

Wal-Mart threatens more than just our tranquility and environmental health. It trades so cheaply because it is big enough to trade on its own terms. In the US it has been fiercely criticised for the appalling working conditions and pitiful wages in the factories in Nicaragua and the South Pacific which make its clothes. Like the British superstores, it has eliminated thousands of smaller retailers. Because it sells everything, no sector is safe.

Wal-Mart will remain cheap while its large competitors stay in the market. But when it consolidates its control of the global retail economy, then the world will live at its mercy. The monster we have welcomed as our messiah will complete the economic cleansing our own superstores have begun.