Wal-Mart Continues to Try To Increase Sprawl in the U.K.

Wal-Mart has long had a monolithic development strategy in the U.S.: build supercenters with massive parking lots outside town centers where natural areas or agricultural land once was. Using this strategy in the United Kingdom has proved a difficult task. Not only is the U.K. geographically much smaller than the U.S., the country also has comprehensive national zoning regulations aimed at combating sprawl. As it tries to expand in the U.K., ASDA (Wal-Mart’s British division) is proving that sprawl and environmental destruction are still very much a part of its business plan, despite the company’s recent environmental efforts. Wal-Mart is continuing to lobby for changes which would destroy what little green space is left in the U.K.

Instead of adapting to a U.K. market, which requires downtown development, ASDA is instead seeking to impose the poor planning strategies of the U.S. Wal-Mart has been lobbying U.K. officials to make England’s strict development restrictions optional. An article in today’s Telegraph examines the latest in a long line of lobbying efforts by the retailer.

Most of this has been in an effort to better compete with British retailer Tesco, ASDA’s main rival. Tesco’s influence over the British market is significant, but ASDA offers an alternative that relies on unsustainable land use policies and the destruction of the local environment.  Tesco has focused heavily on downtown re-development and flexible design in the UK, but this method does not fit in to Wal-Mart’s cookie cutter business model. Tesco has excelled largely by its ability to tailor stores to downtown areas and move away from sprawling big-box developments. Wal-Mart’s inability to follow suit is a huge weakness for the company, here and in England. The Supercenter mentality has lead to a significant amount sprawl development in the U.S. and has, in turn, created problems in many downtown areas in the States. The United Kingdom created a progressive land use policy to ensure vital downtown areas. Tesco created a business strategy focused on these areas, but ASDA, unaccustomed to downtown development, has only proposed making things worse. 

From The Telegraph (U.K.)

Asda, Britain’s third-biggest supermarket chain, is lobbying for planning rules to be suspended in so-called “Tesco towns”, a move which would allow the Wal-Mart- owned retailer to build giant out-of-town superstores on greenfield sites, The Sunday Telegraph has learned.

The plan, included in a recent submission to the Competition Commission, is likely to spark outrage among environmental campaigners.

Details of Asda’s proposals were exposed ahead of the publication of the Commission’s long-awaited remedies statement this week - as a two-year inquiry into the £120bn grocery market reaches its climax.

Documents posted on the commission’s website reveal that Asda lobbied the Commission to include its radical proposals in its own remedies statement.

Under the proposals submitted by Asda, local authorities would be given the power to suspend or vary key planning rules in areas where Tesco was deemed to have “too many stores”. The planning rules in question include those known as the sequential test, needs test and retail impact assessment. All three form a crucial component of the planning system and have been designed to protect town centres and avoid over-development.

The sequential test has forced property developers and retailers wanting to build an out-of-town store to prove that there are no suitable city centre or edge-of-town sites, while the “needs test” has required retailers to demonstrate demand for a new store.

Asda’s submission also calls for the “needs test” to be scrapped across the country - which Wal-Mart has long argued has stymied Asda’s expansion.

There’s nothing sustainable about a company intent on supercenter-like sprawl. Wal-Mart’s land use policies are harmful both to the environment and, ultimately, to the company’s bottom line.

For further information on ASDA’s development strategy and Wal-Mart’s growth issues please read our growth report. For more information on the ASDA and Tesco issues, go to Tescopoly. 

Posted by Research Team on Monday, February 11, 2008

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