Consumers fight back against rivalry and planning logjams

For years James O'Neill didn't get it

For years James O'Neill didn't get it. He went for the special offers, scrimped and saved, tried to make do, yet he always ended up short of money. Things just ended up costing more than he could afford, writes Consumer Affairs Correspondent Paul Cullen.

A low-income single parent from Drogheda, O'Neill heard constantly from friends who travelled to Balbriggan and other towns in search of value. He could have joined them, or could have just complained; instead, he decided to bring the cheaper prices to his doorstep.

"We were being ripped off left, right and centre and we were letting it happen. The last straw was when I saw the town council block a plan by Lidl to open up a store here. I got five sheets of paper, started a petition and it quickly snowballed."

Over 17,000 signatures later, the council changed its stance and the Lidl store got the go-ahead. Now Drogheda has a Lidl and an Aldi and a second Lidl is opening shortly.

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O'Neill's one-man campaign followed on one run by residents of Trim, who gathered 3,000 signatures in a successful bid to bring Lidl to the town. Last month, 7,000 residents of Kanturk joined this trend towards grassroots consumer activism with their call for the low-cost discounter to be allowed open in the Co Cork town.

As least O'Neill has the new stores he fought for. Up in Donegal town, a series of battles between rival developers has stymied all retail development and the townspeople despair of ever getting a new supermarket.

"We're the meat in the sandwich in a fight between different interests. As a result, this part of the country is suffering drastically," says Ernan McGettigan, the town's honorary mayor.

"We should be developing along with Letterkenny as the main hubs in the county, but instead we're 10 years behind."

Last May, 400 people held a vigil to protest over the bickering between developers they say is killing the town. For the past seven years, a variety of schemes both in the town and outside it have been torpedoed, mostly by objections to An Bord Pleanála by commercial rivals.

"It has absolutely nothing to do with planning; it has to do with competitors trying to keep everyone else from going forward," says McGettigan.

Donegal, which has a population of 4,000, has suffered 650 job losses in the past two years. McGettigan says new retail infrastructure to provide competition for the town's Supervalu store is urgently needed to attract fresh inward investment and stop the leakage of shoppers travelling to Sligo and Letterkenny.

As a butcher with a store in the town centre, McGettigan might be the first to feel the heat if large multiples were to arrive, but that hasn't influenced him. "I would welcome Tesco or Dunnes Stores with open arms. If you're running a quality shop and providing reasonable service you should have no fear of competition."

In the case of Donegal, commercial rivalry rather than planning considerations is at the heart of the problem. However, the planning system, by facilitating objectors, has played a major part in the delays. Objections can add up to two years to the time it takes a retail development to come to fruition, according to Dermot Breen, corporate affairs manager with Tesco Ireland.

However, growth has been impeded by what Breen calls anti-competitive objections to new stores. In the decade since it came to Ireland, Tesco has opened almost 20 new stores - not bad perhaps, but less than half the rate it would like to have achieved were it not for serial objections.

In its home base in the UK, Tesco is often criticised as a monster, devouring all competition that comes in its path.

Andrew Simms, policy director of the New Economics Foundation and author of a critical book called Tescopoly, claims the chain brings "a level of aggression" to the market and, by dint of its size, competes unfairly with other retailers.

He says that if Ireland loosens restrictions on big out-of-town stores it risks creating a country full of "ghost towns" with no local shops and "clone towns" with little retail variety. "You risk ending up like the dead zones in the US, with sprawling wildernesses in suburbia dependent on an inherently fragile, petrol-driven life of SUV drivers travelling to big box retailers. That is not a pretty future."

Simms claims big retailers create fewer jobs than small shops; are often more expensive than markets for fresh goods; dissolve the glue that holds communities together; and cause money to leak out of the communities in contrast to small local shops which recirculate the money.

However, Breen says Tesco's position in Ireland and the UK is not comparable. "We're not as strong in Ireland as in the UK. Britain is a different market, with much higher population densities. If we're supposed to be so dominant, how come we're not the majority operators in most Irish towns?"

Chief among the objectors to Tesco's plans has been Rgdata, which is the grocers' federation but is actually dominated by the big distributors, especially Musgave (which owns Supervalu and Centra) and BWG (owners of Spar).

The battle between the large multiples - Tesco and sometimes Dunnes Stores - and Supervalu/Rgdata has been played out in large numbers of Irish provincial towns in recent years. "In a lot of towns dominated by one retailer, their attitude is 'keep the bastards out'," says one retailer of his commercial rivals. "They throw the kitchen sink at you and then hope something might stick."

Wexford, Carrick-on-Shannon, Youghal, Michelstown and Castlebar largely went Tesco's way, while in Loughrea, Cashel, Listowel, Tullow, Ballinrobe, Callan and Castleisland there have been delays or projects have been abandoned.

When asked about Tesco's experience of the planning system, Breen resorts to understatement: "It's been a challenge certainly, but we've won most of the battles we fought."

The rules by which this war is fought are the retail planning guidelines introduced in 2001, which sought to limit the growth of out-of-town superstores by favouring town centres and limiting the size of food stores to 3,000sq m outside Dublin.

Rgdata says its objections to rivals' development plans are motivated solely by opposition to out-of-town centres. However, James O'Neill says it hasn't always stuck to the spirit of the guidelines itself; SuperValu's store in Clonmel, for example, is some distance out of town.

Tesco says it prefers to build in towns, provided a suitable site is available and the new stores do not add to traffic congestion - two mighty caveats in the circumstances. Breen also claims Irish towns are "moving out" and development will soon arrive at the greenfield sites chosen for retail outlets.

Edel Clancy of Musgrave believes the guidelines are working well. "They're doing what they are supposed to do - encouraging competition while maintaining the vibrancy of towns and villages." She vehemently rejects Tesco's claims that her stores are serial objectors to rivals' plans, and points to towns such as Midleton, Glanmire and Carrigaline, where SuperValu stores live cheek by jowl with other retail outlets.

According to Henk van der Kamp, PRO of the Irish Planning Institute, the guidelines get the balance right between encouraging development in towns and not stifling growth outside.

A hierarchical approach to planning puts development in towns as the favoured option, but projects further out can get the go-ahead if it can be shown that no other sites are available.

"The competition issue lies completely outside the guidelines and that is the way it should be." He says the cap on the size of retail units has worked well to prevent the rise of hypermarkets such as those seen in France.

The National Consumer Agency, whose acting chief executive Ann Fitzgerald believes "the more competition the better", says local authorities should not be using the guidelines as a way of restricting competition.

There is, she says, a "suspicion" that local retailers are using vested interests and the planning system to stifle competition.

The Consumers Association of Ireland is also calling for a review of the retail planning guidelines. Chief executive Dermot Jewell says consumer choice has improved significantly since discount retailers started opening stores around the country.

Back in Drogheda, O'Neill has the cheaper shopping he craved but he still doesn't have full-time employment.

"For what I did, I'm the biggest, baddest wolf in town and people don't want to know when I go for job interviews."