Castle Douglas Tesco Letter 's Page Galloway News 10 November 2005

Dear Sir, how long will Tesco last in Castle Douglas? Or will they be forced to up sticks and move out before the paint has even dried on their new store?

I ask the question in all seriousness. Last week, the Association of Convenience Stores won a legal ruling against the Office of Fair Trading over unfair competition by big supermarkets. And next month, an all-party report by MPs will recommend an end to below- cost pricing by the big supermarket chains. Tesco's attempt to take over the 'convenience store' (small, high street supermarkets like Spar and Costcutter) sector is also likely to be blocked.

But the threat which is really worrying Tesco is 'divestment'. This is a legal term used for breaking up a monopoly. Only the Competition Commission have the power to do this. It would mean Tesco having to sell-off some of their stores. The argument is that with 30% (and rising) market share, and with plans to create 1200 convenience stores by 2015, Tesco are getting too big for the free-market economy.

Asked if it would be in the public interest if Tesco had to sell-off some of their stores, Lucy Neville -Rolfe, Tesco's company secretary and director of legal and public affairs, has said it would be a bad idea. But if push comes to shove, Tesco will have do what the Competition Commission tell them to. The interesting question is: which stores will Tesco choose to sacrifice if forced into 'divestment'?

I suggest Tesco would rather not lose their Dumfries mega-store, since Dumfries is the main shopping centre for Dumfries and Galloway. However, as one of their smaller stores, the Castle Douglas Tesco would be expendable and could be offered up to the Competition Commission as a sacrificial 'divestment'.

Of course this is all pure speculation. Tesco may well have enough economic and political clout to see off any such threat to their bid for total market dominance. But just in case the Association of Convenience Stores' David manages to score a direct hit on the Tesco Goliath, perhaps we should start thinking about an alternative use for the Castle Douglas Tesco site.

Possibly another supermarket chain might want to take the site over, but the economic return would be marginal. On any rational economic grounds, Castle Douglas is too small to justify a supermarket on the Tesco site. And as GVA Grimley advised the Council, it is also in the wrong place - the Wallets Mart site was the one Grimley's advised on planning law and practical economic/ access grounds.

Luckily, Tesco haven't yet constructed their sacrificial store. Before they bang it up, there is still the chance for reason and public opinion to prevail. The obvious solution to Tesco's 'divestment' problem is : sell off the site for a new garden centre!