Flexible Working in Food Retailing

A Comparison Between France, Germany, Great Britain and Japan

Christophe Baret, Steffen Lehndorff, Leigh Sparks, Christophe Baret, Steffen Lehndorff, Leigh Sparks

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781135122089
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This book makes use of a four country research programme, covering France, Germany, Great Britain and Japan. Investigations and interviews at store, company and individual levels paint a picture of working times in the sector and in each of the countries. The volume provides some explanations for national differences as well as the similarities; supply and demand issues, as well as societal and social backgrounds. Large format food retailing is a major force in each country, employing millions in many different situations and conditions. This book suggests opportunities for retailers and employees to better manage their situations.

1 The rise of the large format food store
Leigh Sparks

A cryogenic shopper of the 1960s, suddenly revived in the late 1990s, would find a very different pattern of shops, many unfamiliar names and products, and substantially altered retail operations from those of the 1950s and 1960s.

(Dawson and Burt 1998: 159)

Retailing as a sector has been transformed in the past few decades, and within the sector, the organisation and operations of food retailing have perhaps been more radically restructured than many other lines of business. The food retailing system in many developed countries today is quite different to the system of only a few decades ago. In developing countries many of the changes underway reflect the success and dominance of certain retail forms. Within food retailing the rise of the superstore and hypermarket has perhaps been the most fundamental development. Looking around the retail landscape in most developed countries, it would be impossible, almost, to imagine either that the large format retail store was ever controversial or that there were possible other forms through which food retailing might be carried out. This form is now prevalent in many countries and has become the major food shopping destination. There are many thousands of such stores across the world.

Definitional problems have been a major source of limitation in this topic in the past. When is a hypermarket a superstore and vice versa? Is a large supermarket in Japan the same as a hypermarket in France? How are gross and net sales space measured; are they in square feet or metres? Does car parking have to be single surface? And so on. This volume does not intend to be bound by tight definitional issues in this area. The book, and this chapter, is about a tendency in retailing change towards large store formats. Most would recognise these as large supermarkets or superstores or hypermarkets. They differ in definition across countries, but these details should not bother us. We all know a hypermarket when we see one! The aim is to consider representative stores i.e. stores typical of dominant retail forms in each country.

This chapter is concerned with setting the scene generally for the detailed work later in this volume. It provides a general discussion of the rise of the large format food store before closing with some thought as to why this is important in human resource terms. Chapter 2 will take the issue of labour use in retailing and large format stores forward. In this chapter, the rise of the large format food store is discussed within the context of the changes that have been occurring in consumer behaviour and food retailing in developed countries. The characteristics of such stores are explored before the final focus on employment aspects and change.

Consumer behaviour, consumption and food retailing changes

When we consider the changes that have been made to the food retailing system, there are a number of drivers of change and a number of consequences of this change to firms operating successfully in the new circumstances. Table 1.1 lists the topics discussed here under broad headings. This is not to suggest that one is wholly reactive to the other, as there are clear bi-lateral influences, as for example with large firms and government policy (Marsden and Wrigley 1996; Larke 1994). However, the structure in Table 1.1 provides a useful focus for the discussion.

Developed countries have, over the last 30 or so years at least witnessed a major improvement in the living standards and consumption patterns of the majority of the population. There have been breaks in this pattern, often at different times in different countries, but overall the population has seen its conditions improve. Any comparison of Japan in the 1960s, for example, to the Japan of the 1980s demonstrates the point readily. Increases in personal consumption associated with the development of higher living standards are reflected in the growing volume of retail sales. At the same time, however, this volume is not channelled into the same products and service sectors as before. As standards rise, so the breadth of consumption increases as well and individuals are less satisfied with existing circumstances (Sparks 1994a).

Second, the nature of the channel of distribution for these products and services has been changing (Sparks 1994b). Channels were in the past dominated by the manufacturers and consisted basically of these manufacturers pushing product through wholesalers and retailers to the consumer. With the

Table 1.1 Consumer and retailing changes

A Consumer forces	B Retail changes
• Living standards and consumption	• Small firm decline
• Channels of distribution	• Large firm expansion
• Operational environment	• Financial force
• Consumer attitudes	• Strategy development
• Technology change	• Internationalisation
• Government policy	• Alliances and networks

Source: adapted from Dawson and Burt (1998)

changing balance of power in many channels, as well as a desire to reduce costs in the channel, this picture has been reversed (Dawson and Shaw 1990). From a position of weakness, retailers are now often the channel leaders and are responsible for pulling products through the channel on behalf of consumers. This has involved a radical re-think of the functions in the channel and their location, and a reconstruction of distribution operations (Fernie and Sparks 1998).

Third, the operational environment within which retailers operate has been changing. This operational environment is generally perceived as comprising social, economic, technological and political elements within which retailers have to manage. Trends within this complex set of issues, across the countries involved in this volume, show both similarity and difference. Demographic change, for example, across all the countries is leading to a more aged population structure. Other changes are, however, more concentrated on one country, as for example in the reunification of Germany and the opportunities and problems this produced for German retailers. What is perhaps certain is that the pace of change in the environment is picking up and that, in addition to general convergence on certain trends, there are pockets of difference which represent fragments of opportunity.

Fourth, within this operational environment, major shifts have been occurring in consumer attitudes, behaviour and demand. The way in which people go shopping has altered. The locations they go to and the times they go have changed. What they are interested in has altered. There have been major changes in behaviour and attitudes across many countries, reflecting underlying social change. New concepts, such as the regional shopping and leisure centre CentrO in Oberhausen, represent one reflection of this changed consumer behaviour and use of space and time.

Fifth, there have been fundamental changes in technology which have enabled massive changes in the retail operations and the supporting channel of distribution. The barcode and scanning are probably the most visible retail manifestation of this, but other technologies have also had an impact, including materials handling and communications technology development. The rapid replenishment of stores through sales-based ordering and quick response systems demonstrate the integration of such developments. At the consumer end, the ability to use smart cards to store information and download payment and other data, open up further possibilities. Wherever one looks in retailing, technology is playing a part in improving service and performance, and minimising costs.

Finally, government policy has changed in a number of ways. As government policy changes, companies are forced to respond through their decision-making. The introduction of the Loi Royer in France (Burt 1985) or the relaxation of the Large Store Law in Japan (Larke 1994) have considerable consequences for many retailers. Some of these issues are discussed later in the chapter. Location policy is but one arm of government policy however. Wrigley (1998) argues that government and retailer relations in recent decades have been constructed in the UK so as to advantage large businesses and this has had a fundamental impact on food retailing structures. These relations include, but are not exclusive to land-use policy, and indeed, Wrigley probably would argue that other aspects of regulation have been equally, if not more, important.

The general sense of this brief summary of items of general change is of a structure or series of economies that have, and are, undergoing radical change. The environment in all the countries has been transformed by these changes. As Table 1.1 indicates, it is important to also consider the retail responses to the changes.

First, small firms have suffered in the new competitive environment and have left the market. There is no single reason for decline of small firms (Smith and Sparks 1998), but rather a myriad of reasons have made the existence and profitability of small firms more difficult. The decline in small shopkeepers, particularly in food, has been recorded in many countries over a long period of time. For instance, in France (often seen as the home of small independent retailing) in 1969 small general food shops held 38 per cent of the food retail market, but by 1995 this had declined to 6.7 per cent. All of the countries being considered here have seen this phenomenon, even including Japan where small firms have been noted as the mainstay of the retail economy.

Conversely, the market power of large firms has expanded considerably both as a response to the general trends in the economy and as a regulation of the better cost advantages of large businesses. Within Europe the largest retail firms are food-based and are in the main increasing their size considerably. Businesses such as Tengelmann, Metro and Rewe in Germany, Carrefour, Intermarché and Leclerc in France, and Tesco and J. Sainsbury in the UK are market leaders and massive businesses. This growth has occurred incrementally in some cases, but has also been the result of waves of mergers and takeovers. Similarly in Japan, large food retail businesses have been created and continue to grow, e.g. the food formats of Daiei and Ito-Yokado. Many of the businesses in the four countries are also internationalising their shop-based activities as opportunities open up and new markets are identified.

Third, there has been a requirement by many of these leading food retailers for large amounts of finance. Many of the companies are quoted on stock exchanges and have generated financial capital on these markets. The finance needed for takeovers or for the investment to run a large, international food retailing business effectively is immense. At the same time in some markets, the cost of ‘grounding the capital’ in new buildings of increasing sophistication has been very high (eg. Wrigley 1996). This requirement for capital is one of the reasons why large businesses have been able to grow at the expense of small ones.

As companies ha...