The Economics of the Future: Relocalisation
Eight thousand supermarket outlets now account for over 97 per cent of total grocery sales in the UK; a pattern increasingly replicated in other parts of the world. It’s a trend that former Tesco boss Sir Terry Leahy recently called “part of progress”, describing small shops as “medieval”. However, a wealth of research now tells us that there are many more benefits of more local, independent economies.
For example, a study by the Federation of Small Businesses in Scotland found that large supermarket developments led to a decrease in the number of conventional retailers in the town centre, an increase in the number of vacant units and a significant decline in the level of business activities undertaken by existing retailers. A study by Civic Economics in Salt Lake City, Utah compared independent retailers and restaurants with retail chains and national restaurant chains: the local retailers returned 52 per cent of their revenue to the local economy as opposed to 14 per cent for chains, and local restaurants re-circulated 79 per cent of their revenue locally, as opposed to 30 per cent for chains.
A study focusing on New Orleans compared 179,000 square-feet of retail space that is home to 100 independent businesses to the same-sized space that is home to a single supermarket. The former generated $105 million in sales with $34 million staying in the local economy, while the latter generated $50 million in sales with just $8 million staying locally, and necessitated 300,000 square feet of parking space. Another study looked at 2,953 US counties, both rural and urban, and found that the ones with a larger density of small, locally owned businesses had experienced higher per capita income growth, whereas those with higher levels of chain businesses had experienced a negative impact on income growth. They note, that “opening a single Wal-Mart store lowers the average retail wage in the surrounding county by 0.5 – 0.9%”.
Out of business high street shops, Altrincham, Manchester
Back in the UK, the National Retail Planning Forum, in a report ironically part-funded by supermarkets, found that every time a large supermarket opens, on average 276 local jobs are lost; an impact, which can be felt “up to 15km away”. So, if chain businesses are a less efficient way of creating jobs and generating local employment, how about their ability to produce stronger and happier communities? One striking extensive study from the US in 2001 found that communities with large supermarkets had fewer non-profit-making groups and organisations that build social capital (such as political, religious and business groups). The report even linked the presence of large supermarkets with lower voter turnout at elections! They hypothesise that such a drop in community cohesion is due to the disappearance of local businesses, which perform a vital function in providing ‘community glue’.
It seems we are stuck on a conveyor belt towards something that doesn’t work and doesn’t meet our needs, and which centralizes wealth and power away from our communities. As the New Economics Foundation put it:
The problem is that consumers themselves lament the loss of local shops, yet are caught in a vicious circle where choice and price, work and travel patterns, brands and advertising, all conspire to undermine the desire for a vibrant local economy.
In a local and resilient economy, we regard the money that leaks out of our local economy as a missed opportunity. A growing percentage of the money that pours out through supermarkets, online shopping and energy bills instead stays locally, generating training opportunities, new businesses, new investment opportunities and new livelihoods, strengthening the existing economy and enabling all manner of new creative ideas to come to fruition: in short, meeting our needs better. It is a shortening of the distance between producer and consumer, and therefore also a vital part of reducing our oil dependency and carbon emissions. It is easy to see how this concept applies to food, but if we expand it to also cover building materials, energy generation and other key aspects of our local economies, then we start to see a huge potential.
In this way of looking at things, we begin to recognise that we need to live within certain constraints, but that doing so could be the making of us, and indeed that it is in figuring out what this post-growth economy will look like that the real energy, creativity and dynamism lies. It acknowledges that we can be hugely brilliant and insightful, but that we need to apply those gifts to a future that will look very different from our past. We can, after all, create any kind of world we want to…
In what we might call the Transition story, we replace the goal of economic growth with a goal of wellbeing, of happiness, of community and connectedness. But in our daily experience we have been moving further and further away from it, so that it becomes more difficult to imagine. I hope the following story might help to bring it to life for you.
The Market of Hope
The mention above of the 179,000 square feet of retail space in New Orleans reminds me of a recent visit I made to El Mercado de la Esperanza, or ‘The Market of Hope’ in Santander on the northern coast of Spain: the largest indoor covered market of its kind in Cantabria.
The lower floor featured seafood and fish, freshly caught from the Cantabrian Sea. Shrimps, prawns, squid, mussels, plaice, salmon, tuna, sardines, and other amazing-looking creatures I have only ever seen in fossils.
Esperanza Market (The Market of Hope) in Santander
Upstairs was a more eclectic array of food. Fruit, vegetables, a remarkable array of cheese, bread and pastries, meat, cakes, eggs, honey, preserves, huge hams, all manner of pulses displayed in baskets. Unlike the kind of market I’m more used to, set up on trestle tables and gone by the end of the day, this one was permanent. Open six days a week, all day, each stall was its own business, probably kept within families for generations. There were no empty stalls.
We wandered around, buying creamy goats’ cheese, some beautiful flat peachy things that are particular to that area, a bag of delicious greengages that dripped with a juice as sweet as honey, some superb local cheese with aromas of teenagers’ trainers, and some bread. I have been to similar markets, The English Market in Cork in Ireland, St Nicholas Market in Bristol, and perhaps a couple of others, but El Mercado de la Esperanza was extraordinary.
I was struck to see that the total floor space of the market was around that of a city-centre supermarket for a city of the size of Santander. Yet, rather than one single business filling the space to service the interests of its distant shareholders and investors, here was a model for feeding the city from which many hundreds of families derived their livelihoods, in such a way that they had ownership over the destiny of their enterprises. While you could, if you wanted, buy well-known brands of fizzy drinks and crisps there, these were generally tucked away on shelves at the back. The huge majority of what was available was locally sourced; intimately connected to the farmers, food producers and fishermen of the region.
This was a Market of Hope. It was a market of resilience too, and it somehow embodied what we all seek: to meet people, to laugh and smile, hear local news, ask about what you are buying and how to cook it. It built community, created jobs, it enhanced the local economy, celebrated local traditions and culture and it was vibrant and exciting. It was a model capable of functioning through an oil crisis, through recession, as it had indeed done on numerous occasions during its history (it opened in 1904). Rather than representing a small fragment of the past that has hung on as a museum piece, it represents for me a powerful taste of the economy of the future, of how our towns and cities and their resilient local economies could be.
Extracted from The Power of Just Doing Stuff by Rob Hopkins