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.