Supermarkets "Creating" Jobs

irish_goat

Something I've been thinking about the past few days. We hear/read in the news all the time that Tesco/Centra/Supervalu are opening new stores and this will create X number of jobs.

Likewise in Derry Tesco were denied application to open a new superstore and they were arguing that this was preventing hundreds of jobs being created.

How true is this? Surely, a new shop simply takes business away from the current existing stores unless either A: consumers have become more wealthy and have more money available to spend or B: If the new store increases competition enough so that prices decrease and consumers will have more money to spend elsewhere.

In absence of that though the premise is surely that the new store will hoover up some of the existing market and the existing stores will have to cut back on staff. There is no net gain of jobs and infact, there may be a net loss as businesses cut back to try and lower prices. Right?

Hasschu

The retail sector was comprised of tens of thousands of family owned and operated businesses. By the standards of today mark ups were high and economies of scale were largely missing. It was a great source of self employment and employment in general. Then began the invasion of foreign chain operators with their economies of scale in procurement, warehousing, distribution, building/parking size, sales per employee, low management overhead. When a multinational company opens a store it takes business away from less efficient operators and actually reduces the number of jobs overall. We are in a declining market with some companies near bankruptcy, this will simply speed up the loss of jobs. A lot of what passes for business reporting these days is simply supporting those entities that buy advertising. Politicians love it, the public buys it, life goes on.