2007 - 2021

Retail Sacrificed on the Altar of Profit

The Coronavirus crisis has sped up the decimation of our High Streets and the wholesale destruction of retail jobs.

In 2020, over 20,000 UK stores have shut down, with nearly 200,000 retail jobs wiped out.

That’s 200,000 individuals’ lives and livelihoods thrown into chaos, impacting the lives of at least two or three other family members in each case. To put that jobs devastation in perspective, the Ravenscraig steelworks closure in 1992 wiped out 770 direct jobs and about 10,000 others. 

Whilst workers suffer and join the ranks of the unemployed and underemployed, the government utterly fails to engage with retail workers’ unions to develop a recovery strategy rooted in the needs of local communities and workforces. 

Instead, it’s set up task forces stuffed full of bankers, property developers and retail bosses who live on a planet apart from the UK’s 3 million workers in retail – the biggest private sector employer, second only to the NHS across the entire economy. In Scotland, the SNP government’s Recovery task force is headed by Benny Higgins, former CEO of Tesco Bank for a decade, after stints at the RBS and HBOS banks. 

For decades, the get-rich-quick vultures on the financial wing of capitalism consciously wrecked industry and built up their profits through expansion of the financial and services sector. They switched from making things to selling them, making money from owning property and by asset-stripping company takeovers. 

Monopolisation 

The galloping concentration of wealth and property in the retail sector has been given a further boost in 2020. 

Four big supermarkets dominate the food retail sector and have seen a huge surge in sales during lockdowns, as have homeware retailers. Shoppers bought £1billion more in food and drink last month than in January 2020. Grocery sales in general increased by 12% in the most recent 12 weeks, during the latest lockdown. 

In harvesting these profits, they’ve frequently put the health of their staff at risk by cutting corners on PPE, health and safety measures, queuing systems, caps on numbers of shoppers.

They’ve subjected staff to the doubling of abuse and assault from an indefensible minority of customers – often because they expect overstretched supermarket workers to police government regulations, after the same stores offloaded their in-house security staff. 

Sickness absences have rocketed, with 52,000 Tesco workers off at a peak, for instance, and tragic, avoidable deaths are mounting up in the sector. 

Despite trading throughout ‘lockdowns’, these giant supermarkets enjoyed over £1billion in business rates holidays. Under the hammer blows of bad publicity, 13 big retailers (including the Big Four supermarkets) have just agreed to repay £2.16billion of government rates relief, but are turning up the volume on their demand for an extension of the business rates holiday in the Tory government’s 3rd March budget. 

Their online sales have rocketed; doubled. For instance, Tesco and Sainsbury’s have added online capacity equivalent to twice that of the entire Ocado’s retail giant since March 2020 – and Ocado’s retail sales rose 35% to £2.18billion in the year ending November 2020, helping their annual profits rocket by an incredible 266%. 

Non-food Retail Crisis 

In contrast, non-food retail has been walloped by the lockdown; newly published industry analysis shows that sector has lost £22billion worth of sales during the pandemic. This has led to widespread closures and takeovers, as buildings and retail brands are cannibalised by a handful of giant outfits. 

One growing feature of the retail crisis and its horrendous consequences for jobs and communities is the growth of online retail. Online shopping has grown by 46% since pandemic regulations were declared last March, and much of that will become a permanent pattern even when or if some shops reopen. 

In and of itself that should not automatically result in a jobs slaughter, if it just meant redeployment of workers from traditional ‘bricks and mortar’ outlets to the likes of home delivery or ‘click and collect’.

But under the monopoly capitalist ownership of retail, it means the 21st century version of the Dark Satanic Mills of the Industrial Revolution, with the likes of Amazon warehouses treating workers as electronically monitored slaves. Amazon have started installing cameras in their delivery vans, using them to carry out disciplinary actions against drivers whose every move is recorded. 

Capitalists Weaponise New Technology 

As with all new technologies, it’s an opportunity for the dominant capitalist class to devise devilish new ways to exploit and profiteer, rather than unleash the potential benefits to workers and wider society. For example, they use digitised shopping to hire the unpaid labour of customers to do part of the paid jobs workers would previously have done, shedding and deskilling jobs in the process. 

After ripping off workers and their pension funds, Sir Philip Green and his Arcadia Group have abandoned 13,000 staff, only to be taken over by two online retail outfits, Asos and Boohoo, who have made it clear they will keep the brand names but not the 314 shops nor 12,500 of the 13,000 staff, concentrating entirely on online sales.

Likewise, Boohoo gobbled up Debenhams, seeking to inherit its traditional customer base, but purely through online operations, dumping another 12,000 workers. 

This switch from bricks and mortar to online retail is not cost neutral, either in terms of jobs or its impact on the health and environment of communities. 

Online giants like Amazon are notorious tax dodgers, which deprives governments and populations of £billions that could be invested in the Health Service, public transport systems and the upgrading of lived environments in both residential areas and town centres. 

For example, whereas over the past 20 years Marks and Spencer’s paid £3.3billion in UK Corporation Tax, the infinitely larger Amazon coughed up a mere £3.3million – an average of just £165,000 a year! 

Online Sales Tax

My own Union USDAW has published a Retail Industrial Strategy which includes the entirely justified demand for business tax reforms to include an online sales tax. 

It cites the example that a 1% online sales tax would generate £1.5billion, equivalent to offering bricks and mortar retail a 20% cut in business rates. Imagine the resources from an online sales tax much more radical than the meek and mild 1%. 

The cut-throat capitalist competitors are predictably divided on this online sales tax, with Tesco shouting loudly in its favour, but share prices for big online players like Ocado’s, Asos, Boohoo and Amazon stuttering at the talk of Rishi Sunak conceding to this popular, if mild, demand in the Budget. 

But left on its own, what’s dubbed an ‘Amazon Tax’ does not begin to address more fundamental issues. 

Corporation Tax Cuts Harm Society  

Successive Tory and Labour governments have slashed Corporation Tax levels to an historic low. And in the case of an independent Scotland, the SNP would want to cut Corporation Tax – which is based on company profits – even more drastically, with SNP party policy wishing to go down to the level of the Ireland, 12.5%, just over half the current lowly rate. 

Boosting the profits of the already most-profitable big businesses has at least three major consequences. It cuts the funds available to national governments for essential public services. It increases the reliance on business rates as a percentage of overall taxation on businesses, which further hammers the High Street, especially smaller shops. And it puts multinational and giant retail chains in an even stronger position to survive crises like the lockdown, and to devour small and medium firms as they buckle under the strains of business rates, landlord rents, and their inability to enjoy the economies of scale and capital reserves, compared to large companies. 

Parasitic Commercial Landlords 

While retail jobs are slaughtered and High Streets decay into unwelcoming urban deserts, with dreary rows of empty shops, some people are doing very well, thank you! 

Commercial landlords and property developers are part of the cause of many shop closures, but then go on to pile up more profit through asset stripping. 

Battles between landlords and retail companies over their shares of rent, interest and profit have added to closures, which then often allow the landlords to convert buildings into lucrative luxury apartments, or to lease them back. 

One example that illustrates the interlinking ownership and power of retail capitalists and landlords is the iconic Edinburgh fixture, Jenners. 

Originally opened by two local drapers who had been sacked for taking the day off work to attend the Musselburgh races in 1838, Jenners came to epitomize the genteel Victorian Edinburgh middle class, selling fine silks and linen otherwise only to be found in London. 

By 2005, the shopping emporium had struggled to adjust to the 21st century and was bought over by House of Fraser’s – which in turn was grabbed in 2018 by Mike Ashley’s Sports Direct Group. So, from fine silks to stacks of disposable sportswear!

But the architecturally grand building itself was bought in 2017, for £53million, by Danish billionaire Anders Holch Povlsen, who is also the owner of the Bestseller fashion company; the biggest shareholder in online retail ASOS, and is Scotland’s biggest private landowner, owning 220,000 acres across 12 estates. He has personal wealth of £4.5 billion. 

Brutal squabbles between Ashley and Povlsen over rents led to Ashley’s House of Fraser pulling out, dumping 200 workers out of their jobs. 

This example highlights the interlocking and monopolised ownership of retail between capitalist retail giants, landlords, property development companies and indeed landowners.

Some of the property companies continue to make a fortune during the Coronavirus, with Property Week reporting their overall share prices rose by 16% in the final quarter of 2020, and by 67%, 52% and 44% in the cases of NewRiver, Hammerson and British Land, respectively.  

In other cases, such as Britain’s biggest shopping centre group, INTU (Braehead, Manchester Trafford Centre, etc), a mixture of aggressive demands for rent reductions by retailers amidst the lockdown, and problems gaining credit from banks and Canada Pension Plan Board, led to collapse into administration last June, and chaos for INTU’s 3,000 workers.

Public Ownership

These examples and others highlight one of the central solutions which I have persistently argued for during the past 3 years as an elected member for Scottish retail workers on the national Executive Council of our union, USDAW. 

Namely, public ownership of retail giants, including the big supermarkets, and local authority ownership of buildings – to eliminate the multiple levels of profiteering between landlords and capitalists, and the slaughter of jobs and crushing of smaller shopkeepers which this all leads to.

Decades of austerity, with the longest, deepest wage stagnation since the time of the Napoleonic Wars 200 years ago, has crushed the spending power of workers, with a knock-on effect on retail job prospects.

Recovery Based on Workers’ Needs 

Therefore, a retail recovery plan needs to start with decent wages and secure, guaranteed hours for all workers, including an absolute minimum wage of £12-an-hour, with abolition of all lower youth rates, and a guaranteed minimum 16-hour week for all workers who want it. 

Poverty wages are further eaten into by the rising cost of public transport, which alongside cuts to bus routes, reduces the ability of many to even go shopping in town centres let alone outlying retail parks. I still never cease to be amazed at the number of people living in housing schemes who have hardly ever been to the city centre and its amenities. 

For those workers who own a car, increased parking charges in town or city centres further deprives High Streets of footfall. 

Free Public Transport 

Congestion charges and even more exorbitant parking fees – as pedalled by some such as the Scottish Green Party – are no solutions to either poverty or pollution, and would only add to the punitive, regressive, indirect taxes which already make the lowest-paid and middle-income workers contribute a far bigger proportion of their incomes to tax than do the super-rich. 

Retail recovery and the refurbishment of the High Street needs to include massive public investment in networks of fare-free public transport, tackling social isolation too. 

Local Authority Ownership 

Local authorities taking ownership of High Street properties would not only carve out the landlords’ rent-racketeering and asset-stripping by big businesses, but would lay the basis for the planned improvement of town centres and local High Streets, with full input by local communities and retail workers. 

Instead of allowing retail giants and landlords to fight each other for a greater share of the wealth created by workers’ efforts, decimating jobs and High Streets in the process, the Scottish government and local authorities should organise forums of retail workers and their unions, local community groups, environmental artists, planning experts and elected councillors, to determine local needs and demands and turn the High Streets from deserted wastelands into hubs of community activity. 

Community-led Revival of High Street 

This could include use of buildings and spaces for community facilities for all age groups; safe, supervised children’s play areas; sports and leisure facilities; community-owned cafes and restaurants; libraries and resource centres; hubs for creative pursuits; local cinemas and community theatres; markets for fresh, locally-produced food at farm gate prices; allotments; and support for independent small shopkeepers and Co-operatives, instead of the monoculture of the same global retail firms occupying most town centres across the globe. A whole host of changes, decided by local communities, to protect and create meaningful jobs and allow people to improve their mental and physical wellbeing by being able to socially mix. 

As we wrote last April, the Tory government displayed its intimate, interlocking links with big business when they handed Tesco the addresses of homes to pursue for online deliveries during lockdown.

At the same time, they relaxed anti-cartel regulations so that competing supermarket giants could agree basic collaboration on the logistics of food deliveries to their shops.

Make Technology a Blessing, not a Curse 

These two examples give a glimpse of how democratic public ownership of the big supermarkets and other, non-food retail giants would allow more rational planning, instead of the cut-throat competition for profit, and facilitate a whole new vision for the retail sector. A planned application of science with working-class control, turning automation and digitisation into a blessing, not a curse for workers and communities whose jobs and High Streets are steamrollered in the charge for ever-greater margins by tax-dodging online operations. 

A 4-day week without loss of pay, alongside a guaranteed 16-hour week and £12 minimum wage, would not just boost spending in local communities but also liberate millions of working-class people from drudgery, insecurity and oceans of household debt, which in turn undermines other people’s jobs. 

Increased Corporation Taxes on profit and reduced taxation of small businesses could also contribute to reversal of the funding cuts to local councils, for investment in community hubs and free local transport networks, thereby improving the lives of all. 

Organise for a Secure Future  

None of these transformative reforms are going to be gifted to society by some invisible class of benevolent retail capitalists, commercial retail landlords or bankers.

It will take a massive movement of working-class people, including retail workers, to end the rule and ruination of our communities by the landlords and capitalists who increasingly own more and more of the giant retail industry, as it’s strangled in the hands of fewer and fewer profiteers. 

 

This article was first published in Scottish Socialist Voice.

Comments (8)

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  1. SleepingDog says:

    What is this supposed to be, car-driving consumer-socialism? Not much here for the underclasses, a proposed power-grab by trade unions, nothing for the planet. What is so great about high street full of shops? Where is the internationalism, the recognition that the UK exploits and poisons overseas, the environmental reality checks? No reflection on the nature of work itself, nor a vision of the good life beyond the wage and the God of Retail. Why tinker so lightly with a system of parasites, profiteering and pollution?

    1. Adrian Roper says:

      Why such sharp and inaccurate criticism?
      Free public transport will help the underclass and the planet.
      The proposals are principally about public ownership, not trade union ownership.
      Ok, public authorities are usually unionised, but they are also constituted for public benefit and democratically accountable. The article was arguing for more public ownership for public benefit reasons, and it seems cynical to cast it as a union power grab.
      Besides which, the parasitic, profiteering and polluting powers in the land are the captains of finance, industry and retail, against whom trade unions are a vital and currently weakened defence. If unions find a way to grab some power in these dark times, what’s not to like?

      I don’t know if Ritchie’s proposals have got legs, but I do think they represent a positive agenda. I suspect they need to be part of a bigger programme including a public power grab in the banking sector, and some means of overcoming the parasites’ control of the media. More big asks, but the change we need is very big.

      What would you propose for addressing the problems Ritchie addresses?

      1. SleepingDog says:

        @Adrian Roper, this article looks like trade union reformism to me, not a fundamental rethink of politics, society, economy, environment etc. It seems rather superficial and simplistic in its concepts. Why are supermarkets the answer? What is the question? It is common in socialism to address needs:
        https://en.wikipedia.org/wiki/From_each_according_to_his_ability,_to_each_according_to_his_needs
        as well as the kind of occupations by which people thrive. This article seems very light on these. Why not slay the God of Retail, with its inefficiencies, overconsumption, waste, pollution, exploitation? Too many solutions proposed for the UK do nothing to address issues elsewhere, and the article does not even attempt to explain the political changes necessary to bring about these economic, cultural ones.

        We should be reconsidering the amount of travel we were doing before (and during) the pandemic (and reduce it), and the uses and abuses of technology (our information systems allow remote working, but their great power requirements are partly driven by online advertising, inefficient code and e-currency mining). And far from all personal debt is the result of an unfair political system.

        My view is that we should start from an argument about how people should live on the planet amidst other life, and redesign our political systems from there, not inherit the vast flaws from a failing system as we tinker round the edges.

        1. Adrian Roper says:

          Thanks.
          I appreciate your answer.
          I wonder whether there is much difference between what you and Ritchie want as an end game. Perhaps it’s mainly the old socialist question of how (reform or revolution?) that divides. The greens have a similar question.
          I’m glad people are trying both.

          1. SleepingDog says:

            @Adrian Roper, sure, I think I share many of the concerns of the article, and I would support more public ownership in essential services. George Monbiot talks of private sufficiency and public luxury, although perhaps public wealth is a better term. Perhaps my initial post seems a bit harsh, but the times require urgency and great change:
            https://news.un.org/en/story/2021/02/1085452

            My current related views, in brief, include:
            • a breakdown of traditional job (occupation/profession/career) culture into smaller structural components, which would help social cohesion/empathy, reduce boredom/increase satisfaction, flexibly respond to need, diversify skills and build resilience etc.
            • an honest appraisal that corruption/incompetence/abuse happens at every level of the workplace (my experience of the underclasses backed by psychological research suggests that the unemployed, for example, may be generally more honest than those in work; there was a disgraceful national newspaper campaign smearing unemployed people for benefit fraud, when it was those in work that were committing the frauds, and in any case this was a tiny fraction of UK tax evasion sums);
            • a rejection of class virtue claims (this also applies to classes such as ‘artists’ and so forth);
            • rebalancing of international relations, which may also involve some reparations for past imperial crimes (perhaps the royals and aristocrats could be stripped of their wealth which could be used to fund community land buyouts in the British Caribbean, for example — #RoyalReparations);
            • green authoritarianism integrated into democratic structures (planetary representation in parliaments).

  2. Colin Turbett says:

    Richie Venton has done more to change the world and make it a better place than most, so criticisms that he is arguing for limited reform are misplaced at best and arrogant at worst. He has also made more sacrifice to do that than those who preach anti-consumerism but who are happy to use social media and electronic devices made by workers, and retailed by workers like the ones Richie represents. Richie’s solutions are radical ones but based on concrete demands and arguments that will resonate with people far beyond the reach of those who read blogs like this one. Arguing a vacuous case for immediate revolution will fail as it always has done – the movement for change has to be built and it is socialists like Richie who are showing us how. We can hope that COP21 will rise to the challenge of consumer-driven climate change, but that is only likely if there is an organised movement from below to make the demand deafening and irresistible. Arguments around why we need free public transport can help bring people into that vital struggle.

    1. Pub Bore says:

      This is all very well and resonant with the old-timey religion of industrial socialism. None of the transformative reforms that Richie proposes is going to be gifted to society by some invisible class of benevolent retail capitalists, commercial retail landlords, or bankers. But neither will they be delivered by some fabulous ‘mass movement of working-class people’. To imagine so is no less wet a dream as that of immediate revolution.

      The sublation of our decaying commercial spaces into a broader range of social use will only be achieved by local people, working in voluntary association, with or without the support of government, reoccupying and repurposing those spaces spontaneously and haphazardly according to their self-defined needs and interests. It won’t be socially engineered through the state on the old planned industrial model by some millennial party-disciplined proletariat.

    2. SleepingDog says:

      @Colin Turbett, please great me no greats and statue me no statues. The article should stand without reputation’s prop.

      It is interesting you mention technologies like social media and electronic devices. Social media relies on layers of Internet technology and standards built often in communistic fashion and with oftentimes unpaid labour. Some social media sites may be built entirely on open source software like the LAMP bundle, while the web itself is built on the concept of royalty-free standards. Using stuff made by workers is not consumerism. I tend to use the hell out of my electronic devices (any day I may start taking like my granny: “It’ll see me oot!”). But if I needlessly bought new electronic products beyond my needs, or capacity for use, where a goal was the acquisition (and possibly social display) of these devices, that would be consumerism. Many of these devices will be made in China, so where does this £12/h wage, or trade unionisation fit in? China dominates the mining, refining and supply of many of the world’s technology metals, elements which are needed typically in very small quantities to make the various parts of our modern devices work (the Economist calculated that 75 of the 118 elements of the Periodic Table were used in a typical smartphone). So if Scotland hardly has a domestic electronics industry, and certainly not a standalone one, it is hard to see your point. Are you advising consumers to boycott non-trade-union-labour products, or always use a fair-trade option if available?

      Technology has been in constant revolution in the past decades, and changes during contemporary lifetimes have been great and global and unprecedented. It is puzzling that so many people still claim that revolution is somehow impossible, even as change accelerates, lifetime careers disappear, new kinds of jobs are constantly created, and various systems collapse. The one global pattern I do not expect to see is gradual reform, the kind of future a follower of the End of History school might swear by.

      Anyway, trade unions tend towards conservatism, divisiveness (say, one TU for managers, one for professionals, another for general staff, various others for special trades, all with in one organisation, all with different and competing agendas), vested interest (they are typically supposed to represent their members’ interests, not wider concerns). Unions have also been known to cosy up with management, and some have been notably infiltrated. Unions have hardly shone in many of the equal pay and worker discrimination battles in history, even if some are now stepping up. Why would you trust them with industrial, let alone social policy?

      Free travel is not without cost: what is the overall objective? Social isolation can be more effectively countered by car bans, as any amount of research will tell you. Walk, cycle, talk, trundle, meet the neighbours. And what’s wrong with deliveries, like groceries of old, perishables like milk delivered in silent, economic electric carts? Maybe Amazon, for all its faults, is simply adopting the most efficient distribution model, and the questions of taxation and working conditions can be handled separately?

      It can hardly have escaped people’s notice that various industries, unsustainable before and certain during the pandemic, have been selectively propped up by governments. Further, there are many ‘bullshit jobs’, and many jobs that are actually pretty evil, like the industries monitored in the UK by the Campaign Against the Arms Trade, many of them unionised, I gather. It seems like The Job is sacred object of worship, here.

      Finally, there is a literary device, not unknown in Bella’s pages, of setting out one’s credentials in progressive-sounding terms, only to shoehorn in one’s own interests or provide an alternative which fails to connect to the buildup or resolve the problems previously applied. It is called a non sequitur (‘it does not follow’) and in logic, it is a fallacy.
      https://en.wikipedia.org/wiki/Non_sequitur_(literary_device)
      I do have some sympathy with the general tenor of the article, but many of these ‘working-class people’ have been buying into consumerism and helping create the modern world with all its problems, including vapid celebrity-culture, seasonal overindulgences, and not even being willing to pay for a good-quality news service (so are they even listening?). And a minority are providing life support for everyone else during the pandemic, and with great responsibility comes…

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