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It’s hard to feel sympathy for Tesco’s bosses – because ultimately it’s the customers who are going to benefit.
The supermarket price war that’s behind Tesco’s shrinking share of the British grocery market doesn’t get written about much – but it’s actually the best thing that’s happened for consumers in the UK this year.
What really matters isn’t the scandal over Tesco’s grossly-overstated profits, even though it’s now clear it overstated its profits for the first half of 2014 by an eye-watering £118 million.
What really matters is the 4.6 per cent decline in Tesco’s annual sales. This is a big setback that is sending the supermarket’s overall market share well below 30 per cent for the first time in nearly a decade.
The rise of online shopping and the emergence of discount alternatives like Aldi and Lidl seem to be driving a positive change in the grocery world, weakening the unhealthy grip of four big players over the sector.
— Mark Roberts (@boyroberts) April 22, 2014
At a time when most people are feeling the pinch, this shift will make much more of a difference to ordinary people’s lives than the piecemeal, small-scale policy changes made by our constrained politicians in Westminster.
It’s hard to get away from the politics because the recession and the austerity it triggered have made us all more sensitive to the fortunes of a company like Tesco.
Our economy might be growing again but many haven’t noticed. Wages are suppressed, leaving five million workers trapped in low pay.
In fact, as Alan Milburn’s Commission on Social Mobility and Child Poverty found earlier this week, the 2010s are set to be the first decade since the Second World War that absolute poverty has risen, not fallen.
With so many people vulnerable, in part because of this government’s welfare and public spending policies, anything that makes the cost of living a little easier has got to be good news.
Tesco’s share of the UK grocery market has shrunk to its lowest level in almost a decade // love Tesco??? pic.twitter.com/nCZPiByZXE
— matt-zee-miller (@MattZeeMiller) March 12, 2014
As a Westminster watcher I can’t help but see a parallel here with what’s going on in British politics.
Compare the market sector shift in the grocery sector with the poll ratings of the main political parties and you get the idea.
People are fed up with what’s being offered by the mainstream. They’re looking for alternatives that suit them better: Ukip or the Green party, Waitrose or Aldi.
A little bit more choice for voters is a good thing – just as it is for shoppers.
It’s not an argument that Tesco’s bosses are going to have much sympathy with.
But if they want to change things and win back support then they need to make changes – in exactly the same way that David Cameron and Ed Miliband do, too.