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Op-Ed

The Beginning of the End For Britain's 'Merchant Class'?

Bright Simons, Essex, U.K., February 2, 2007

Shops are often badly lit, poorly laid out and, sometimes, even plain dreary and musky when all that is needed is often a little bit of dusting and lamp-fixing.

With the ongoing trial of six persons of minority faith background for attempting to blow up passenger trains in London, and the recent uproar about casual racism on reality television, how can anyone even dare to hold the opinion, let alone explicitly express it, that the biggest threat to inter-community relations in Britain today is, in actual fact, not to do with the faith question, but working class racism or discrimination against blacks and Asian Britons by the wider society? Yet, I may be just about to make precisely that argument.

Indeed, I may actually go further and argue that the threat may not be political or cultural at all, but rather that it is embodied in the narrow issue of the traditional corner shops' demise! Not something, I concede, many in the communal relations industry will immediately recognize as being of utmost priority, but it could be. And come to think of it, it may not even be all that "narrow" after all.

It is estimated that somewhere around seventy percent of England's small to medium-size grocery retail outlets are now run by persons of minority background or descent. Beside the role of this business community in fostering a sense of communal pride and positive social mobility, it also provides employment to large sections of the ethnic population, who would otherwise swell the ranks of the unemployed.

Shopkeeping has in the past provided the launching pad to higher mobility for several minority groups who have, on its back, left the ranks of the disaffected throngs and embarked on their own versions of the "British Dream" (well, there is such a thing, isn't there?). I speak, of course, of Indians, Sikhs, and the first wave of Caribbean migrants from the smaller islands such as Trinidad and Tobago.

The expectation, as well as some indications, was until not too long ago, that the more recent wave of entrants, Somalians, Sri Lankans, Bangladeshis, Nigerians and most notably Pakistanis were on a slow but steady path out of communal poverty through the shopkeeping corridor.

Take the owners of the Atkar stores in the Dagenham area of what once used to be considered more Essex than London, for instance. Not only have they provided employment for tens of freshly arrived Sri Lankan and Bangladeshi migrants, sometimes actually sponsoring their work permits, and catered marvelously to immediate family members — supporting a son through medical school and a daughter through Law School — Mr. and Mrs. Atkar have also managed to save enough for a mortgage on a veritable mansion in "real" Essex — Southend — worth all of $1.9 (£1) million and change.

Examples such as the above have for several years provided proof to students and scholars of migration that the much contested issue of "social mobility" is tied to concrete opportunities, or the lack thereof, made available by concrete socio-economic activity rather than to some vague concepts of "a culture of entrepreneurship" anchored to ethnic identity (the great "culture vs. structure" debate).

The studies have also drawn attention to the demise of the corner shop from an ethnic perspective that hitherto had been all but missing.

The concern about the corner shop's imminent extinction has traditionally derived from anxiety about the "decline" of British town centers as venues of cultural expression through their diversity of offerings — a florist there; a fishmonger here; a baker yonder; a greengrocer behind the post office; and the always curious items in the haberdasher's stall.

People feel that all the color is draining away now that franchises of national chains are succeeding in making all town centers look the same. And not just color, but also flavor, and even more disturbingly, character, too are slipping away. Some have blamed increasing juvenile crime on the weakening of the social function once played by town centers as congregation points for bored youth, and as places for trade in local gossip, that provided the opportunity for significant intermingling amongst the generations. The young, thus, had the occasion to learn habits of restraint. Or, at least, so it is believed.

People knew their bakers, their druggists and locksmiths and knew to stop by and say hello and inquire after the children's health or the dog's limp, even if they had no present need of the wares being offered. Not anymore. Folks breeze by the floridly designed, bland facades of carbon-copied shopfronts as if they couldn't bear the thought of staying even a minute longer.

Says Mary, a librarian at the relocated Barking Library in the Vicarage Center, who has been working for the library long before its relocation, "people haven't time for other people anymore, unless they need something from them, and even then they go at it as if it was causing pain in the neck."

But as I have said, that kind of anxiety over town centers is now a bit dated, the wholesale transformation of Britain's retail life and shopping culture is almost complete, and the vast majority of "local shops" today are groceries run by persons from "ethnic backgrounds." "One-stop" shopping has clearly become the norm, and complaints about the new status quo appears confined to a few die-hard "nostalgians." Not many people, even if they join in the moaning, are really prepared to give up the convenience the big supermarkets offer in terms of parking, product range, and various little amenities such as baby changing rooms and multi-gender toilets. Even the hated "metros" — mini versions of the big marts — often situated right in the middle of the High Street alongside the grocers, and therefore theoretically disadvantaged in the same ways, are redeemed by their price competitiveness — the most important thing they share with their bigger siblings in the suburbs in this price-conscious age.

Whilst the public clamor for redress may be low, elite concern has begun to grow. And lobbying by such groups as The Forum of Private Business, which champion the interests of corner shopkeepers and other small-scale entrepreneur types, have managed to keep the issue in the limelight, by pointing to overlooked concerns about future consumer welfare should all competition to supermarkets be irreparably undermined.

In February of last year, the All-Party Parliamentary Group for Small Shops in the British House of Commons warned that corner shops could become extinct by 2015 if the $480 (£245) billion retail industry was abandoned to the stranglehold of the Big Four supermarkets. In a passionate plea full of metaphorical flourish, corner shops were described as the "social glue" that kept communities intact. However, beyond the melodrama, the group did raise a salient point about the long-term health of competition in Britain's 300,000-shop retail market. Supermarkets have every incentive to cut prices unsustainably in the short-term if they can, by this tactic, also kill off all independent competition so they can have the field to themselves in latter years.

It was highlighted that the retail industry employs almost one in five of all rural dwellers and certainly more than one in ten of the national workforce.

Soon after the parliamentary report, pressure from lobby groups caused Britain's Office of Fair Trading (OFT), a kind of market ombudsman, to launch an investigation under the 2002 Enterprise ACT, which grants the agency clear and sometimes extensive powers. Three months of enquiries convinced the OFT that sufficient evidence existed to warrant a detailed scrutiny of the retail market so as to establish whether or not competition was being hindered. So the case was referred to the Competition Commission, another ombudsman-type agency.

All this while, the emphasis has been kept on the long-term prospects of healthy competition. That is, whether supermarkets enjoyed unfair advantage in the market place and whether this could harm consumers eventually by restricting choice and reducing the incentive for innovation. So far there is little indication that the ethnic dimension has been picked up yet. Few minority activist groups have joined hands with consumer activists or small business lobby groups in the fray.

However the lack of success in using the competition argument, evidenced by the conclusion by the Competition Commission in its recent first report on the investigation that supermarkets are not unfairly undermining competition by, perhaps, bullying suppliers, is likely to see the community-relations aspect of the issue increasingly raised.

The difficulty, though, is that supermarkets are not the sole threat to the corner shop. Ongoing and intensifying efforts to ban, or at least severely restrict, smoking, increasing preference for obscure ready-made gourmet dishes amongst even the lowest-earning families, and campaigns against snacks, by far the fastest-selling products in corner shops, are having significant unintended consequences for small shopkeepers.

Tobacco may have low retail margins but it is a major "footfall driver." That is, it brings in customers who end up buying other items too. Also, given the preference of most smokers for the relatively hassle-free process of cigarette buying in corner shops compared to crowded supermarkets, tobacco is one of the very few products that corner shops can compete effectively against supermarkets, making it a great lubricant for cash flow.

Mr. Mashool of Lambs, a small shop in Hornchurch, for instance, spends approximately $11,800 (£6,000) stocking up on cigarettes each week but just about $7,900 (£4,000) on his remaining range of products. In a line of business where credit can be hard to come by, banks are often keen on studying cash flow figures closely to decide whether it is worth their while to advance loans. Another major cash puller that is currently the subject of some public animosity is alcohol. This is also a line of products that independent shops, traditionally called "Off Licenses," have proved resilient in the face of supermarket encroachment.

Nor are all shopkeepers the hapless victims of cruel circumstance they are often made out to be. Some refuse to maintain any semblance of welcome on their premises. Shops are often badly lit, poorly laid out and, sometimes, even plain dreary and musky when all that is needed is often a little bit of dusting and lamp-fixing. I have with my own eyes seen stock reserves stored in bathrooms and under cobwebbed stairs because owners can't be bothered to erect a spare upper shelf or two; I have seen shopkeepers haggle in wholesale warehouses over items that clearly should be consigned to the bin for the lowest price in the obvious hope of making lavish profits on them, without the barest hint of considering customer welfare.

And, this may sound cynical, but anybody with intimate knowledge about the retail business will find it hard to romanticize the "haplessness" of shopkeepers, who are as price-obsessed as the most fanatical discount shop-addict you can find. Cash and Carry operators, who stock small shops, regularly complain that they are forced to operate on the tightest margins possible because shopkeepers are unbelievably price-sensitive. Many cash and carries therefore have taken to importing most of their lines, even where it is clear that U.K. customer preference is opposed to this. Interestingly, they observe that shopkeepers almost never bring down their prices even when wholesale prices are slashed during promotions and special offers.

Many of the nation's most respected cash and carries, such as the largest chain Booker, are struggling to meet investors' expectations as profits slump at key branches.

It is not surprising therefore, in the light of falling wholesale prices, that the Competition Commission report mentioned earlier saw "no clear correlation between the size of buyers (measured by share of national retail sales) and better buying terms" after an extensive investigation. Any exclusive focus on supermarkets as the sole cause of woe for corner shops will almost likely prove simplistic.

But I am certain that a realization of the impact on community relations, and not just on consumer welfare, could bring another level of concern that is less blame-driven and more solution-oriented. For, as I have mentioned, it is not only that seventy percent of small and independent shopkeepers are non-white, it is also about the fact that for the majority of the minority population, who have not been fortunate enough to receive extensive British education because they were perhaps not born in the U.K., shopkeeping has proved the most durable and reliable means to self-empowerment. A large swathe of the settled migrant population in waged labor scrimp and save for several years in the hope of owning their own shop some day. This hope is strong and uplifting, and deserving of nourishment.

So what do I reckon can be done? I have no ready answers, but to my mind the future lies in "cooperatives" of various sorts. Independent chains like Londis and Costcutter have proved successful by building recognizable brands to win customer trust, boost bulk orders in order to ensure price competitiveness, and above all offer training and support to shopkeepers who subscribe to the mutual franchise. I know of at least one social innovator who is establishing a Web site to serve local shops by allowing them to participate in an Internet shopping scheme. His software will allow local transport operators to team up with shopkeepers and offer a milkman-style mail order facility over the Internet in local merchandise and even fresh produce.

These are the innovations likely to prove beneficial in the long run, and save the glorious corner shop from extinction! Maybe, just maybe, the "Merchant Classes" may not be so endangered after all.

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