Future of Lerwick town centre under threat from Tesco expansion, say retailers

How the enlarged Tesco store will look from the north (top) and east. Click on image to enlarge.

The future of Lerwick’s town centre is under threat from Tesco’s imminent expansion, according to retailers crying foul over its plans to sell non-food items that might otherwise be bought from the street.

Construction workers will begin developing the area to the west of the South Road supermarket from Monday, with a planned completion set down for the second week of July.

The move will increase the overall floor space from 12,874 sq ft to 34,186 sq ft, meaning more room in the shop as well as for major improvements to the warehouse and staff areas. The grassy area to the front of the store will be turned over to provide extra parking, adding 76 spaces.

The contract has been given to Ayrshire company Barr Construction, which deals with the majority of building for Tesco north of the border, however much of the work has been sub-contracted to local firms.

Town centre shop owners warned the “vitality and viability” of Commercial Street was under threat, claiming the proposals breached planning consent by increasing the area of floor space given over to items such as clothing.

Laurence Smith of the Town Centre Association said the plans went beyond an agreement that the existing 185 sq metres for non-food, or “comparison” goods, would not be increased when the extension was built.

He raised his concerns following a consultation meeting organised by the store’s manager Paul Clelland, who has also met MSP Tavish Scott and is due to meet members of Lerwick Community Council next week.

“We have extremely serious concerns over what has been shown to us. The plans show a serious deviation into the sale of comparison goods,” Mr Smith said.

“This is contrary to our understanding of the planning application and the basis on which planning approval was granted.

“We consider the plans as shown to us … breach the planning consent and also that all previously submitted impact assessments should be considered null and void.

“The proposal, as shown, will without doubt have a major impact on the town centre – and on its vitality and viability.

“This contravenes policies both within the structure plan for Shetland and the Lerwick local plan. The strength of the town centre lies in its non-food comparison shopping.”

He said the area had struggled since Tesco first opened its doors in 2008, and was likely to suffer more as a result of internet shopping and the council’s decision to move the new Anderson High School to Clickimin.

“To come and show us what they showed us yesterday beggars belief. This is going to affect every business in the town centre. That’s a serious issue for Lerwick.

“We’re in a small town of 7,500 people desperately trying to make positive moves to improve the street and this could absolutely shatter any positive steps we are trying to take.”

His comments were backed by chairwoman of the Shetland Retailers’ Association Janet Davidge, who described the supermarket giant as “a juggernaut”.

“The fact Tesco is doubling in size has got to be cause for concern, which we have always said. It would be naive to think Tesco doubling its size is not going to have an effect on the town centre,” she said.

“The retail sector is very fragile. I would be very surprised if no-one felt the effects of such an expansion. The number of non-food items seems to be a lot greater than they initially said. They never said they were going to have so much clothing.”

Retailers had feared the extension would sound the death-knell for other businesses when it was announced shortly after Tesco first took over the former Somerfield store.

However speaking to The Shetland Times Mr Clelland said businesses had come to accept the company, adding that much of the work was required to address the building’s limitations, especially given the growing numbers of staff who don the Tesco uniform – up from 78 during the Somerfield days to 120 now.

“If you look back at some of the speculation at the time when we first came, I think two years down the line a lot of the comments made haven’t come to pass,” he said.

“I know from speaking to customers and staff that they are very excited about what we’re going to do and very pleased we’re going to do it.

“The infrastructure of the store, the warehouse space, is compromised. The amount of chilled and frozen storage we have in the shop isn’t sufficient for what we need on a day to day basis.

“We’ve got two refrigerated units on hire in the back yard – two 40 ft units, one chilled and one frozen – because we don’t have the storage capacity for the stock that we need for trade in the shop.”

He said the extension would give the store a chance to “grow and consolidate” its stationary ranges, as well as its lines in home entertainment, telephones and TVs, although the only products not previously featured would be a small line in clothing. White goods, he said, would not be sold from the Lerwick branch.

“As part of the original opening of this store we carried out a customer question time where customers were surveyed and asked what was liked about the store and if we extended it what they would like to see.

“We also carried out some surveys around the time of the planning application for the extension … That drives what we are looking to do with the extension.

“We’ve analysed the space in the existing shop and we understand what areas are most under pressure – fresh foods, wines and spirits, cooking ingredients, household and pet foods.”

Mr Clelland said the extension would provide a more suitable staff room, as well as a new training room.

“We’ve not got a proper staff room, as we see it. It’s not what we would put in a new Tesco store.

“My training room only holds four people. Ideally we do most of the training on the shop floor, shoulder to shoulder with staff, however there are times when you need to take people off the shop floor. Just having a four-seat training room means you have no flexibility around what you can do.

“We’ve got a pretty settled team in store and I think they are very excited about what we’re going to do. I think what’s great for them is that every single department in the store is touched by the extension.”

Head of the planning board, West side councillor Frank Robertson, said he had “no proof” plans breached any planning regulations.

“There will be a planning enforcement check to make sure that area [dedicated to non-food sales] remains at 185 sq metres. The planning department would make sure they stayed within that area that was granted or previously approved.”


Add Your Comment
  • susan pearl

    • April 8th, 2010 18:54

    Tesco did exactly the same in my town down south in England. first, we had a food store, then it expanded much more than expected into the non-food sector. The first stage killed half the town’s retail business, the second stage was terminal. My town now has nothing but charity shops, cafes, banks plus a handful of independents waiting to retire. I came as a tourist to Shetland in 2008 and remember it as a beautiful lively town full of useful shops. I’m so sad that Tesco has come to town. My advice is STOP THAT EXTENSION IF YOU CAN. If you can’t, your best bet is to get in Sainsburys so you at least have some choice over where you shop, and give Tesco some of the same competition medicine that they meted out to your lovely independents. Very good luck to you all. Susan Pearl.

  • Stan Johnson

    • April 8th, 2010 22:05

    Not much of a surprise really. The TCA and SRA using their usual tactics of attempting to stifle other businesses, rather than provide good quality and service, in order to maintain their stranglehold on the Shetland consumer.

    Now that the internet and the likes of Tesco are offering Shetland people the opportunity to buy goods with the same convenience and competitive prices available to the rest of the country, the shops on “Da Street” are getting twitchy in case they have to curb their profits in order to be competitive. That’s the free market economy for you.

    I’m an ex-pat Shetlander living in Newcastle Upon Tyne and I have the luxury of being able to drive 10 minutes to the nearest decent sized Tesco (or Asda or Sainsbury) and get a damn sight more choice than will be on offer in the new, expanded, Lerwick Tesco store. Why should my fellow Shetlanders be denied the same choice because the local shop owners don’t have the gumption or the business skills to compete?

    It’s about time the Lerwick shopkeepers woke up to the fact that they can no longer rely on the captive market they have been accustomed to in the past and will have to compete with others for their share of the hard earned cash of the local people.

    It’s time to cast off the yoke of provincialism and embrace the freedom that competition and choice afford.

  • Mr B Twigley

    • April 8th, 2010 22:29

    To be honest, shetland shops at the moment have sort of a monopoly hold on people in the isles, being able to impose large levies on top of the normal price simply because they can, and no one has ever challenged it. Until now of course, when a decent shop comes in and wants to serve its customers well by offering great products at low prices. The town centre association doesn’t try and shut down the internet, so why complain about a bit of local competition? Just because someone is trying to challenge the monopoly…

    I seriously doubt that tesco, by stocking what is easily available on the internet, will shut down the street. Instead of getting things from tesco direct they can purchase a bit more in the local store such as more CDs games etc, which will make no odds to people owning local shops, because people mainly buy online anyway due to extortionate prices charged by local shops.

    Also, most of these people who complain and moan (a VERY small minority, mostly shop owners) shop at tesco, and would benefit from the extension as well.

    To quote Janet Davidge on her point, it would be naive to say that it would have a noticable effect, because it simply wouldn’t, there are no more customers to attract than go there now, just because tescos will sell a little more of this and that does not mean that the expensive shops on the street will shuy down and become a ghost town. All the association want is something to complain about because people wont pay their outrageously high prices for common goods which tesco supplies for a lot cheaper.

  • Alvin

    • April 13th, 2010 12:00

    Being only on the island since Sept last year, one thing I can say is the local shops are pricing themselves out of business. A view shared by most of the people working in the same office as me.

  • Cecil Hughson

    • May 6th, 2010 12:54

    As da street’s oldest shop owner, I must object to the suggestion that we are selling everything too expensive. The last count I found we were selling 34 different digital cameras, 6 different camcorders and 19 different Vodafone Pay-As-You-Talk mobile phones. Tesco have a big range of cameras and camcorders but only 13 different Pay-As-You-Go phones on the Vodafone network. On checking with Tesco Direct environmentally friendly latest catalogue (Spring/Summer 2010), not a single one of our cameras/camcorders are selling more expensive than the identical model in Tesco.

    The same goes for Vodafone mobiles. You can, however, buy the same model of mobile selling cheaper on Tesco’s own Tesco Mobile network (making more money for Tesco). Unfortunately Lerwick customers are not told that the Tesco Mobile coverage is much poorer compared to the Vodafone coverage.

    I can’t speak for other shops in Lerwick, but I know that newspapers don’t have a surcharge here as they did the last time I visited Jersey. Likewise, I purchased masonry paint for my house at Frank Williamsons at £11.99 for the can and found the identical paint in B&Q at £16.99 – a substantial difference. I think the main problem is that some people automatically assume the small shops will be more expensive without actually checking.

    I would like to ask the Newcastle man why, if our prices are so bad, do we sell so many cameras from our website to places like Newcastle and London?

  • Donna Ramsay

    • December 22nd, 2010 17:12

    i think the shops are far to expensive in shetland and i think tescos is great espesh when u have kids to feed and dress its been great having tesco this christmas were we are getting cheaper toys etc i say bring on a asda up here and give people what they want

  • Alun Rundle

    • December 24th, 2010 11:30

    You already have a Co-op in competition with Tesco. With two of them in competition, the town centre can – just – survive. Get a third big name up there and it won’t. The best option for a third if you have to have one, is someone who’ll sell the bands Tesco and Co-op won’t. Lidl or Aldi and ignore the jokes. But I’d personally prefer a real town centre shop to them.

  • James

    • December 26th, 2010 4:52

    Convenience they may offer but the bad news is they cause inflation and push systems to the brink.

  • Pete Morley

    • December 26th, 2010 15:24

    I live in a small town in Lincolnshire,roughly the size of Lerwick. Less than 20 miles awaythere are 3 larger towns,the City of Lincoln and the towns of Doncaster and Scunthorpe.
    Gainsborough town centre has no large chain outlets selling goods other than the Co-op,which has, sometime ago, closed it’s food and toys store due to competion from more recently built Tesco and Morrisons supermarkets. There are also the lesser known Aldi and Lidl.
    So there is plenty of scope for food and grocery shopping ,however many people travel to the larger towns for other more expensive goods ,tv’s, larger kitchen appliances computers,etc.
    I have visited Shetland quite a few times now and found the prices of goods compare favourably with those in my hometown.
    Shetland is an island and goods have to be shipped so it follows that goods will be on average more expensive,that is the law of economics. people who buy online also pay an additional carriage charge.
    Incidentally ,I have visited the shop Mr Hughson makes reference to and found his prices
    more than fair in comparison to my home town .
    The main ‘gripe ‘ I found when talking to Shetlanders was the cost of fuel and the cost of housing ,I would have thought these need to be addressed first.

    In closing I would like to say I find Shetland a very special and beautiful place,dont overcrowd it with numerous supermarkets,the Co-op do a mighty fine job,I hate shopping in Tesco

  • Debbie Nicolson

    • December 27th, 2010 9:36

    Because of all the bad weather I didn’t do my usual last minute online shopping for Christmas because I didn’t think it would get here in time. So I headed for the street one day. I walked up and down and looked in a few shops and a few windows. I wasn’t particularly looking at prices but more the choices that were available. I had a couple of ideas and one thing in particular that I was told by someone was on sale in one particular shop. However, when I got there they had sold out. I couldn’t find anything I wanted to buy so I ended my shopping trip with nothing so I went to Tescos and got a few things there.

  • Andrew T Gibson

    • January 2nd, 2011 1:02

    I was shocked to discover that Tescos were gradually increasing the prices of many goods through out the month of December. As an example a dvd such as Toy story 3 began on a special promotion for £8 when you spent over a certain amount on shopping. However when the promotion finished it went back up to just under ten pounds. I checked the price just before Christmas which had rose again to £15.97. (I could get a blue ray twin pack from Amazon for this price!)
    Disgusted by this sneaky move I went to Clives Record shop where I found the same dvd for £12.99. I bought the majority of my dvds, games and cd’s their out of principal.

    I also noticed other types of products had rose in price from earlier in the month, you really need to watch Tesco they start some products cheap to get you hooked and then gradually increase them!

  • Gerald Watson

    • May 12th, 2021 11:22

    Through the economy of scale, The big chains like Tesco will always be able to offer a wide variety of goods at very competitive prices and there will be no shortage of people willing to shop there it’s a train you can’t stop I’m afraid !! Move away from the ‘Pile it High and Sell it Cheap’ concept and adopt a more targeted approach to offer up more specialised goods that people want and appreciate. I have seem this work very successfully in many towns across the UK. Don’t be afraid to take on the big boys !


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