Tesco Beauty Expansion Threatens Small Shops
A pilot project by Tesco to run in-store hair and beauty salons has been described by small-business groups as a threat to independent retailers that are struggling to survive.
The project, which will see chain Regis Salons offering “luxury at great Tesco prices” in Tesco Extra stores in eight towns and cities in England and Wales could force small shops to close and will be “just one more reason for shoppers not to visit their local high street”, according to Forum of Private Business (FPB) chief executive Phil Orford.
“Supermarkets now sell a multitude of products including TVs, music and clothing, which has all had a huge impact on the landscape of the British high street. Unfortunately, it seems Tesco is now looking to help itself to a piece of the one market where the supermarkets have so far not ventured. But where one goes, the fear is others will follow, and you have to wonder how long it will be before their rivals do the same.”
The FPB pointed out that hair and beauty sector employs around 250,000 people and is worth an estimated £8 billion a year in the UK. FPB spokesman Phil McCabe also quoted Competition Commission evidence suggesting that small shops had been hit by the expansion and diversification of larger retailers, saying:
“Since 2000, sales in supermarkets have grown by 26 per cent, and by 19 per cent in large convenience stores, while specialist stores experienced only a 1 per cent growth in sales.”
The National Hairdressers’ Federation (NHF) also voiced alarm at Tesco’s plans.
“The concern we have is Tesco getting its teeth into the retail products side.”
said NHF president Mark Corey.
“Most professional products like shampoos and conditioners are only available in salons, where sales account, on average, for about 14 per cent of turnover. I believe, with Clubcard points, people would be tempted away from buying in salons. If they start to operate these services it would become a major issue for the market.”
But a spokeswoman for Tesco dismissed the concerns, saying that there was room in the hair and beauty market for everyone.
“There’s a massive range of offers out there, with people offering anything from very discounted to very expensive cuts. We want to make it as simple as possible for our customers who are looking for a bit of luxury at great Tesco prices.”
Noting that Tesco had been selling hair and beauty products “for a long, long time” without detriment to the industry, she said:
“People are always putting these allegations to us, whether we move into groceries or anything else. But what we actually find is that businesses around us thrive.”
However, McCabe said the pilot put the high street “under attack” and called on the Competition Commission to “focus its efforts on helping independent retailers remain viable against competition from the supermarkets.”