tesco fares poorly in market study

Even before European grocery-retail giant Tesco arrives in the U.S., it’s already under scrutiny for its business practices. A study issued yesterday by the Urban & Environmental Policy Institute at Occidental College, titled “Shopping for a Market: Evaluating Tesco’s Entry into Los Angeles and the United States” said the company fails to meet the environmental and social standards it claims to set. (Click to view the entire report.)

The report’s authors draw negative comparisons between Tesco and Wal-Mart, arguing that some employees along the company’s massive supply chain work in “sweat shop” Tesco started out as a grocer and worked “in the opposite direction as Wal-Mart” and grew into a retail giant, the report’s authors state.

In growing so rapidly and offering so much at low prices, Tesco has “undermined some of the smaller competitors,” said Robert Gottlieb,

  one of the report’s authors.

For example, in the workplace, “Tesco promises that its stores will be ‘a great place to work.’ However, in the United States, the company has decided to rely on part-time rather than full-time employees at its stores, limiting the ability of its workers to earn a living wage without having to juggle multiple jobs. In addition, Tesco has refused to engage in discussions with local unions.” the report said. “Its position on unions in the United States contrasts with its partnership with a large British union that represents over 120,000 Tesco store workers in the United Kingdom. At the same time, Tesco has had contentious relationships with other U.K. unions, and work place abuses have been identified among several of Tesco’s suppliers and contractors.”

On the environment: “In the United States, Tesco’s warehouse plans include a solar roof that will provide 20% of its energy. However, the warehouse is located in a heavily polluted region that the additional truck traffic and its emissions of particulate matter will further turn the region into a type of environmental sacrifice zone,” the report said. “In the United States, Tesco has promoted its pro environment and health profile, hoping to attract an environmentally conscious and health-oriented consumer base in Los Angeles and the Southwest. However, the company does not plan to duplicate all of its U.K. initiatives in this area.”

“We’ve not had the opportunity to review the UEPI report in any detail, however, we welcome the opportunity to prove to our customers and constituents in the US that we stand by our promise to deliver fresh, quality, affordable foods in all communities, to be a good steward of the environment and to be a great place to work,” Tim Mason, CEO of the Fresh & Easy Neighborhood Market told the Los Angeles Press Telegram. “Our employees – all of whom we intend will work more than 20 hours per week – will be compensated well above the minimum wage and receive a competitive rewards package that includes health care, a quarterly bonus and other benefits. And, we will seek every opportunity to site stores in many types of neighborhoods, including those underserved by traditional supermarkets.”

The company runs 2,000 supermarkets, supercenters, and convenience shops in the U.K., where it’s the No. 1 retailer. The company announced last month it plans to enter the U.S. and Southern California with 100 of its Fresh and Easy convenience stores and eventually expand upon those numbers. Its 12 Los Angeles-area stores include branches in Lakewood, Long Beach, Norwalk and in supermarket-starved Compton.

Only one store is going into an underserved neighborhood, in Los Angeles, and only a handful of the stores are going into low-income neighborhoods, the report’s authors say.

The chain has made promises before that it hasn’t kept, said Amanda Shaffer, another of the report’s authors.

“Tesco’s Fresh & Easy markets are going to make a huge impact on the United States,” she said, adding, “we found that Tesco doesn’t always live up to its promise of social responsibility.”

The report can be viewed in its entirety online by visiting the Urban & Environmental Policy Institute at Occidental College.

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