Supermarkets in a Post-Oil Food System
Supermarkets currently dominate the UK's food system, with around 80-85% of groceries sold through a handful of retailers. It is therefore understandable that those who seek to make the food system more sustainable often want to talk to the supermarkets. However, there are a number of reasons to suppose that these retailers may be relatively insignificant in a post-oil food system.
- Big retailers are corporations and depend on the financial system to keep them supplied with capital - whether through bank loans or investments such as shares. Yet peak oil may spell the end of that supply of capital. Small retailers who own their own shop (and often live above it) are much less dependent on external capital and are therefore much more resilient in the face of this economic turmoil.
- Supermarkets' main distinguishing feature is the wide range of goods they supply, from fresh vegetables to ready meals. Yet, as we have noted elsewhere on this website, more informal markets for fresh vegetables might well undercut larger-scale, commercial supply chains. And ready meals and other processed goods might well disappear from the post-oil food system. Supermarkets might therefore be left with relatively little to sell - at least not the wide range that currently distinguishes them from smaller retailers.
- Supermarkets currently occupy some large out-of-town sites, which will become a liability as oil prices price consumers out of their cars and into neighbourhood shops.
Supermarkets have made a lot of noise in recent years about their adoption of "local food". In our opinion there is a good deal of greenwash in these claims. Agricultural production has become very concentrated - the very opposite of the notion of local food. This is continuing in 2008, with fruit and vegetable growers in particular still quitting the business in large numbers as the supermarkets press for ever more price cuts: economies of scale mean that a £100m farming business can shave a penny or two off the price compared to a £10m farm. The result is that, for many types of fruit and vegetable, there are now only one or two huge growers in the whole of the UK. Yet, this concentration still means that the supermarkets can identify a few products in each region that are produced there. For example, East Anglia hosts some of the biggest supermarket suppliers of carrots, onions, potatoes and pork. So it's no surprise that the supermarkets can put labels on some of their carrots, onions, potatoes and pork showing that they come from East Anglia. This simple technique - labelling as local what was produced here anyway - accounts for the vast majority of the "local food" offering of the supermarkets.
This page has concentrated on supermarkets, but it would be a mistake to think that these points only apply to the "big four". Many of the same observations apply to smaller supermarket chains (including the co-operatives), and also the wholesalers who supply almost all of the convenience stores. This is one of the reasons why we at EAFL are increasingly turning our attention to Community Supported Agriculture as well as specialist craft retailers such as butchers and bakers.