21st July 2018
Established 1872. Online since 1996.

We don’t need a Tesco petrol station

Very astonished, I read that Tesco is in talks with Shetland Islands Council’s roads and planning departments for a suitable site for a petrol station in Lerwick.

From Tesco’s point of view it is a transparent and understandable intention. Nothing wrong with that. It wants to enlarge its market power in Shetland.

But I do not understand why Shetland’s administrators seem to accept the idea. I expect that they care for the welfare of Shetland, but if Tesco builds a petrol station in Shetland there is a good chance that a minimum of two other petrol stations could close down as well as endangering other small food shops. At the end we will not have cheaper petrol but fewer local shops, fewer employees and less income staying in Shetland.

I don’t know the cost structure of the existing petrol stations but I can imagine that they provide some earnings to their owners. Economic experts call that an “umbrella effect”; this means that the prices are so high that it is easy for another producer to go on the market and sell the same product. Although the new company has costs in building up its business it will become a successful one because the profit margins are so high that it will pay back soon.

A petrol station does not only sell petrol. Food and products of daily life are the second “standing leg” which will help Tesco to reach its break-even point soon and make profit at the new location.

Tesco has the market power, the financial strength and cheaper purchasing conditions that will surpass the strength of the local businesses. At the end as a monopolist the monopolist dictates the rules and the prices.

So from Tesco’s view its planning is understandable but this would not necessarily benefit anyone else who lives on the islands. It might be £10 a month saved on cheaper fuel but is it worth for the short term?

I am always astonished when I see car engines running while nobody is in it or someone makes a break leaving the engine running.

Be aware of the benefits we have at the moment: local petrol stations and shops employ more people trading the goods because their efficiency is not so high as eg Tesco.

The people are okay with their jobs and they spend – I guess – most of the money again in Shetland. Someone else will have an income from that … and so on.

Most of the money Tesco gets will go south, to its sub-contractors and at the end to its shareholders. If the money is spend for goods or services offered by a local entrepreneur and becomes part of his profit, so it is still in Shetland and a part of it will be spent in Shetland again, helping others here to earn some money.

It is better for us all to get as much money as we can, as a community, into Shetland’s economy and keep it in the local circulation because that will keep the economic situation of Shetland stable.

In this sense I would like to suggest two other ways to support the local economy and raise the efficiency of your personal shopping budget:

The first way is to compare the prices for goods your local grocer provides. There are several items you can get there for the same price as at one of the large supermarkets in Lerwick.

Sometimes you don’t need such a quantity as offered in the supermarket – your local shop sells many times for less money a smaller unit which fits for your purposes completely. By the way you meet people in the shop who care about your belongings and have time for a chat too.

For the stuff you will not get there will be enough opportunities to go to the supermarkets. Their welfare will not suffer from the money you spent locally but your grocery does. Did you notice all the food products the two supermarkets in Lerwick increased the prices of during the last year by about 10 per cent?

The second way is a way to save money: buy on farmers’ markets or from your crofter in your neighbourhood. You can get fresher goods, tasting better and cheaper. You might be astonished about the range of food you can get there. You do something for the environment (glasses and bags are used a second or third time, less pollution through shorter transport ways …) and you will meet there many friendly people too.

There will be times when you can’t buy all you need locally but look around and buy locally whenever it is possible. Keep a lookout for buying opportunities. It can be interesting and exciting. For the welfare of Shetland and us we don’t need an additional petrol station here.

Arwed Wenger
Anderson Road,
Lerwick.

11 comments

  1. Alan

    Well said sir. Contrary to belief that only Lerwick Town Centre members have an issue with Tesco, there are plenty right-minded people who can see that there are ethical considerations beyond this money-grubbing lot’s offer of cheap goods. They are destroying choice the length and breadth of this country and removing money from local economies and putting into hands of rich shareholders.

    PS I’m sure the Lerwick lifeboat team will appreciate the £1,000 donation from Tesco. But it’s worth noting it would have cost the company 0.00003% of its £3 billion+ profits. It takes them all of 10 seconds to earn the profit, and self-trumpeting of their “generosity” is a bit hard to stomach.

    Reply
  2. paul barlow

    so we should be happy for the money to head off to ireland. yes support the shops but don’t get ripped off. we should be paying no more than orkney.

    Reply
  3. M Madigan

    Let’s summarise this…Tesco plan to open a petrol station which will provide fuel far cheaper than locally and we don’t need it??? What planet are you guys on?

    Also and i quote from above ‘They are destroying choice the length and breadth of this country and removing money from local economies and putting into hands of rich shareholders.’

    Before Tesco came to Shetland the choices were shop on the street and pay far more than for a similar item down south or move along and pay far more than for a similar item down south….i think you see where i’m going with this!! Now that Tesco are here i can go to the street and pay through the nose or buy cheaper at Tesco’s…I know what choice i would make. Before i didn’t have any choice but to shop in the street. So how have Tesco’s ruined my choices exactly???

    As for the local economy, how many people have Tesco’s employed since they opened here and where does the majority of the wages go? Back in to the local economy of course.

    Buy locally whenever possible? I don’t think so. I will buy at best price whenever possible and that’s hardly ever local as was the case below which happened to me a couple of weeks ago.

    I wanted to buy one of the TV’s Tesco currently have . Not surprisingly the model i wanted was sold out. It was on sale for £120. I decided to go into town and look for a similar one. The cheapest i could find was over £300. I rest my case.

    Tesco’s is the best thing that ever happened to Shetland for a long time. They actually make a direct difference to the consumer. What i mean by that is do we have cheap fuel because of Sullom Voe…of course not. Will we all benefit from cheap electricity from the wind farm…of course not. I suspect most of this money will be spent on some daft local community projects or whatever that will not benefit the common Shetlander in the slightest!!

    Mr Madigan.

    Reply
  4. Robert Smith

    Mr Wenger sells the local shops and petrol stations a bit short I think. Yes, Tesco’s will be difficult to compete with but I’m sure you Shelties are up to the challenge. It’s called healthy competition and it makes everyone raise their game to everyone’s benefit.
    The alternative that Mr Wenger supports so elequently has been tried many times before with devestating consequences.
    See: Soviet Russia, North Korea, Zimbabwe, Communist China, Cuba.

    Marx died before he could see the folly of his ideas, what’s your excuse Mr Wenger? 🙂

    Reply
  5. Leona Leask

    Supporting local fuel companies maybe what people see as loyal but did they take fuel prices down when national fuel prices dropped?

    Reply
  6. RH

    Be nice to strike a happy medium here folks…. we need Tesco’s prices, but you don’t want to damage community benefits…. Perhaps the council could negotiate a % of profits go back into the local economy – e.g. a fraction goes back towards roads maintenance or community projects – and in turn Tesco don’t need to repeatedly do local sponsorship or donations to ‘maintain their name’. Or – negotiate good annual sponsorship arrangements for a community wide effort. Tesco must look to work with communities – so let’s be pro-active and use that. Who knows – there may even be a multinationals in the community breakthrough…

    It can work in everyone’s favour – competition drives quality and choice. Use it to advantage for everyone I say. 🙂

    Reply
  7. mark

    Don’t be fooled by Tesco promises, their plans are purely for their benefit not yours. Having lived in a Tesco town, their prices go only one way when they kill off the competition and that’s up!

    As for local shop owners. Get on and do something before it’s too late.

    Reply
  8. Gordon Lawrie

    Earlier this year I walked around Lerwick on a Sunday morning at about 10am observing the bemused searching of 2000 cruise liner passengers for somewhere to spend their Euros.

    I counted four open shops – 3 of which wouldn’t accept euros.

    Maybe Tescos can show Shetland what customer service is all about.

    Reply
  9. Alun

    Just out of interest, why don’t Tesco attempt to purchase the Sound Petrol station? It would have to be cheaper than building a new one and would ensure at least the jobs of the staff there.

    Reply
  10. Viv

    Waken up people. Tesco is not your saviour

    Reply
  11. S Middela

    I do understand the outrage caused by a proposed opening of a petrol station. I wanted to fill up my car at 900 on a Sunday morning and surprise, no station were open. If Tesco can provide quality service it will only add to the competition. I do feel sorry for the local stores who have got used to the “way of life”. Good Luck with your fight guys

    Reply

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