FoE turns its guns on Wal-Mart

Friends of the Earth (FoE), the UK-based lobby group, has been among the most vociferous critics of UK supermarket group Tesco as it extends its leadership of the British market.

But now the organisation is targeting the world's number one retailer, Wal-Mart, accusing it of exploiting loopholes in the law to expand its UK unit, Asda.

FoE's executive director Tony Juniper will tell MPs and peers this evening that Asda's recently announced plans to put in mezzanine floors in around 40 stores across the UK is nothing more than a means of increasing floorspace without the need for planning permission, and that this will have a detrimental effect on competition.

Juniper's case will be supported by the MP Colin Breed, who recently criticised the government for not doing more to address what he called the negative impacts of the dramatic rise to dominance of the supermarket chains.

Juniper will tell MPs that the addition of mezzanine or basement extensions to existing stores - such as Asda's outlets in York and Sheffield which are already in the process of being converted - can have very significant impacts on local communities and businesses in the same way as new stores do.

But since these extensions do not require planning permission from the local authorities, there is almost no way that this kind of expansion can be halted, according to Juniper.

"Asda is already claiming that its mezzanine floor in York, housing non-food goods, is drawing people in their cars from much further afield,"​ Juniper presentation reads. "Traffic generation can cause congestion and pollution and would normally be assessed by the planning authority."​

But while Asda is the principal culprit in the eyes of FoE, it is also unlikely to be the only one, Juniper believes. "Any larger retailer can exploit the same loophole. The scope for uncontrolled expansion is considerable and could make a mockery of national planning guidance which seeks to protect town centre shops, local communities and the local environment."​

Wal-Mart refutes the FoE claims, saying that most existing retail units are subject to planning restrictions controlling the amount of floor space that can be used to sell products.

"In these circumstances, the addition of a mezzanine level does require planning permission,"​ said Nick Agarwal, spokesman for the chain.

He also corrected FoE's figures: "While it is true that 40 of our stores could have a mezzanine (i.e. there's space in the roof void), we have no current plans to introduce this number. Indeed we announced in February that we'd introduce three this year in Sheffield, Govan and Cumbernauld to add to the one at York.​

"In line with our efforts to abide by the letter and spirit of planning regulations, we ensured we had permission from the local authority to proceed with each, including a full-blown planning application in Glasgow."​

And while FoE clearly sees this kind of store expansion programme as one which is detrimental to consumers - by pushing smaller retailers out of business - Agarwal claimed that mezzanines (and other refurbishment programmes planned for the year) were in fact "a positive example of how we're adapting to tough planning regulations to do exactly what local planners want - make more efficient use of existing in-store space without relying on land-hungry extension programmes".​

Friends of the Earth​ is proposing an amendment to the Planning Bill which is currently progressing through Parliament. The amendment would mean that the installation of additional retail floorspace within an existing store would require planning permission.

Although it has principally targeted Tesco in the Safeway bid battle, Friends of the Earth is also opposed to Wal-Mart's attempt to take over the supermarket chain.

"Market concentration of the big supermarkets has already gone too far. The top five supermarket chains now account for two thirds of food sales, while half of the country's food is now sold from just 1,000 giant stores. The power of the big retailers has enabled them to squeeze prices to farmers, and drive small shops out of business,"​ Juniper claimed.