Supermarkets are marvellous examples of the law of unintended consequences. Any rational individual will choose to do most of his or her shopping in a supermarket: in general, the prices will be lower, the choice greater, the quality more consistent (and usually higher overall) and the service speedier. This has been more or less true for at least 40 years. Anyone who can remember the corner shops and convenience stores of the 1950s will know that, far from being full of flavoursome fresh produce, most offered little more than mouldy Cheddar, limp lettuce and tinned fruit of unknown age, served by surly assistants who, asked for anything slightly out of the ordinary, would announce that there was "no demand for it". Yet the cumulative effects of our perfectly sensible individual choices led to results that nobody would think desirable: the decline in rural communities and urban high streets, the growth in traffic congestion (caused by lorries delivering from centralised distribution points and people travelling longer distances to do their shopping) and the loss of small retail outlets, to name just a few. This is precisely why arguments should never be closed off by quoting "what the consumer wants". What consumers want as food shoppers may not be what they want as citizens, householders, employees, motorists or pedestrians or, for that matter, as shoppers for other goods and services.
Even on the narrowest consumerist view, the growing concentration of supermarkets is cause for concern. At present, five chains - Tesco, Sainsbury, Asda, Safeway and Morrison - control more than 80 per cent of the grocery market. If Safeway, now the subject of a bidding war, falls to one of its rivals, the market will cross what Patrick Hosking (page 8) calls "the tipping point" into the area where, as the business schools teach, monopoly practices emerge. Indeed, when a supermarket has no local competitors, the prices are already higher than average, as a Competition Commission report found. Moreover, even the wide product choice of which the supermarkets boast is not quite as consumer-friendly as it seems. You may be able to buy mangoes, kiwi fruit and strawberries all year round. But the option to buy locally grown produce, such as English apples or cherries, for example, is increasingly closed off - not least because hundreds of varieties, lacking any retail outlet, have simply disappeared.
Conventional economics merely notes the numbers, assuming that a huge increase in varieties of chilled meals represents an unqualified gain to the consumer; it does not recognise the more subtle dimensions to choice. As for the producers, they are too unfashionable to be worth considering. They are the biggest victims of the supermarkets' monopoly powers, suffering squeezed profit margins and extended delays in payment. But why care about producers when consumers benefit from lower prices and more reliable food? Isn't a healthy, growing economy all about increased efficiency and lower costs? True enough, but let us not then pretend that we are concerned about bankrupt farmers, low wages, illegal immigrants (who account, according to some estimates, for 40 per cent of the labour used by the supermarkets' suppliers) or third world poverty.
The wider social impact of the supermarkets is perhaps most important of all. Their effect on the fabric of British life was spelt out in a New Economics Foundation report just before Christmas. Since the 1940s, around 100,000 small shops have closed. There are now fewer than 10,000 high street butchers' shops left in the whole of Britain and, according to the Countryside Agency, seven out of ten English villages now have no shops at all. Local pharmacies struggle to survive, as do many newsagents. These are the results of direct supermarket competition. But as supermarkets drain shoppers away from villages and town centres, post offices, bank branches and pubs (the Countryside Agency says that more than half of England's villages are now pub-less for the first time since the Norman conquest) become uneconomic. So, less obviously, do lawyers and accountants, plumbers and decorators, window-cleaners and builders, because they lose their biggest and most reliable customers. Whole communities - including some in the poorer areas of big cities - lose their economic lifeblood. The New Economics Foundation suggests that the worst of the devastation is still to come, probably over the next five years.
Very little of this is understood by economists, as demonstrated by the Independent's relentlessly cheerful economics commentator Hamish McRae. He insists that nobody actually has to shop at a supermarket (we can all follow the McRae family to their Kurdish fruit and veg shop round the corner in Islington, north London); advises poor people who cannot afford cars to take taxis to out-of-town supermarkets (because the savings will supposedly outweigh the costs); and complains that you cannot buy non-French wine in French supermarkets (which are regulated and restricted to a wicked extent in comparison with their British counterparts), as though there were any reason why anyone would want to.
Mr McRae writes: "If there is one single social change that has improved the quality of life over the last generation, it is surely the supermarkets." But an equally good case can be made for saying the exact opposite, if we can raise our eyes from the quality of life enjoyed by affluent metropolitans. In truth, it probably doesn't matter if the number of major supermarkets is reduced to four or even three. Their financial muscle and lobbying power over both national and local government is enormous. The damage is done, and will go on being done. It is a lesson in political as well as market failure.
