IN 1929, when Jack Cohen was planning to open his first store in north London, he no doubt started off with a jotter and a chewed pencil as he worked out whether or not it would be a viable business.
It's a fair bet he began with how much he would have to pay his suppliers. Then there was the cost of the shop premises and any other overheads. He would have worked out how much he could reasonably charge his customers for the provisions he intended
to sell. Finally he would have to compare the figures, establish he could make an overall profit and factor in any other costs such as taxes.
In his first year he would have depended heavily on a good relationship with his suppliers so that he could rely on regular, reliable delivery and good prices to keep his books balanced.
As his little grocery empire grew, so he helped grow the economy; the suppliers thrived and earned more from him, his own income increased, he would take on more staff providing employment and the happy customers kept on coming.
It was a perfect business model. There were no losers.
Fast forward to 2008 and that business has become Tesco.
The suppliers are not so happy now because they are being squeezed to death. So much so that the Competition Commission has recognised that Tesco and all the other big players such as Asda, Morrison's and Sainsbury's are guilty of exploitation by using their cornering of the market to offer only piffling amounts to farmers and other suppliers. With Tesco's pre-tax profits alone standing at £2.8 billion, the conclusion that they are feathering their own nests and that of their shareholders rather than helping the economy generally is inescapable.
And so they have been told plans are afoot to stop them taking advantage. This remember, comes hot on the heels of accusations of cartel pricing and collusion over retail pricing.
And what is the response of the supermarkets? A simple threat. Blackmail if you will. They say that if they are forced to pay fair prices to suppliers, they will simply pass that cost on to their customers. Never mind that because of their bullying and unfair tactics, their profits to date have been artificially inflated.
According to these big, retail giants, either the suppliers or the shoppers can pay but their profit margins will stay untouched and in the billions. That is not "business". That is extortion.
Even I could run a supermarket empire if I was allowed to pay suppliers a fraction of the true cost and decide, along with the rest of my supermarket pals, what I was going to charge.
Supermarkets are not alone. We have the banks. Despite the credit crunch which is having a cataclysmic effect on ordinary people, the Royal Bank of Scotland's profits rose to £10.3bn. Funnily enough, and also despite the credit crunch which came about because of the incompetent lending of the banking industry, those in the financial sector still picked up bonuses, baffling the rest of us. Bonuses for what? Causing a recession? Meanwhile, banks are facing court action for unfair charges on millions of customers, such as charging £30 to send out a letter telling us we are £10 overdrawn.
Their response should they lose and be forced to stop this practice? A simple threat. Blackmail, if you will. They say if they are forced to charge customers fairly we will see the end of "free" banking and they will just have to charge more for other services. We will pay one way or another but their profits are sacrosanct. Sound familiar?
Their profits and those of supermarkets are no real reflection of the economy as it affects life in the UK because the money isn't circulating. It's moving in one direction . . . from us to the pockets of banks, supermarkets and their shareholders. It's heads they win and tails we lose.
The law, the Government, the Competitions Commission et al can put out as many edicts as they like about immoral, unfair "business" practices. But until they find some way of ensuring the cost of righting these wrongs comes from the profits of the guilty, and not from further charging their "victims" they are wasting their time.
No crumbs of comfortWHEN Which? magazine decided to test the 33 keyboards in its own offices, a microbiologist found nine to be serious health risks and ordered one of them to be condemned. It was 150 times over the acceptable limit for bacteria and was five times as filthy as a typical lavvie seat. The main cause was identified as people eating lunch at their desks.
It will be interesting to see what Health & Safety do with this one. They could order employers to reintroduce practices of 30 years ago where firms of professional cleaners were contracted to clean every phone in the building and add PCs and keyboards to the remit. Or they could insist no food is consumed at work stations, meaning hundreds of lost working hours "wasted" in lunch breaks.
Then again, that might be offset by the numbers of days lost by staff with inexplicable bugs, repeated colds and stomach upsets now dubbed "qwerty tummy".
The full article contains 881 words and appears in Edinburgh Evening News newspaper.
