When supermarkets dictate what we buy

When supermarkets dictate what we buy

Big retailers – supermarkets, hypermarkets, big stores – monopolise such huge volumes of sales that they have the power to impose prices and sales conditions that end up wiping out small producers. Picture (from September 2017) of a supermarket in Madrid.

(Laura Villadiego)

Perhaps the biggest victory of the capitalist system has been to make us believe that economy and society are different things, totally distinct spheres that should be analysed separately. As observed by thinkers such as Marcel Mauss and Karl Polanyi, this separation was a radical shift in modern Western society as compared with societies in any other place or era, for which economic processes are embedded within society, the political sphere and even in the concept of what is sacred.

This belief, nonetheless, became so firmly rooted in our minds, that when, within no more than two decades, the big retail model swiftly moved in and drove out traditional small retailers, the phenomenon was seen from an economic perspective, which is focused on profitability and fails to take into account the profound and radical changes this model implies in terms of our social fabric, employment relationships, urban planning and subjectivities.

In Spain (the data for which can be extrapolated to a multitude of economies across the planet), the first supermarket appeared in 1973, in Prat de Llobregat. Today, over 80 per cent of all household purchases are made in supermarkets, and 75 per cent of those purchases are concentrated within the top five big chains, headed by Mercadona.

When it comes to food, big retail controls 72 per cent of the market share, according to the figures of the Spanish Ministry of Agriculture, Food and the Environment (MAGRAMA). The flipside of the phenomenon is the decline in small retail.

Every time a supermarket chain or a shopping centre moves into an area, the same argument is used to legitimise it: job creation. Yet this argument conceals the jobs destroyed when the arrival of a supermarket drives out traditional local retailers.

There is also a qualitative shift in the jobs provided: a share of the people hired go from being small independent shop owners to being salaried employees who depend on these major companies for their livelihoods. It is not a question of idealising traditional small retailers, but about holding to account the big companies responsible for ever-declining labour rights. To give an example, Mercadona has been criticised for putting pressure on its employees to stop them from taking sick leave.

Small producers, together with small retailers, are also among the big losers of this model.

The big retailers handle such sales volumes – economists refer them as an oligopsony – that they have become price makers and impose conditions on their suppliers that small producers cannot possibly meet, such as payment terms of 60 to 90 days, the obligation to take part in promotional costs within the sales outlet, or the return of unsold merchandise.

Some authors liken the situation to the funnel theory: the producers and consumers are many, but the business is controlled by a small group of distributors, who impose their rules, ensuring huge profit margins for themselves, often over 400 per cent of the price paid to the producer.

The debacle of Spain’s cattle farmers provides us with a clear example. The COAG, which brings together farmers’ organisations, has denounced the fact that producers find themselves forced to sell at prices that do not always cover their production costs. Whilst in March 2015, they were being paid almost €0.38 (US$0.45) for a litre of milk, in May 2015 they were receiving less than €0.31 (US$0.31).

The result is that small cattle farmers end up bankrupt and the big, more “competitive” companies take their place, imposing a food model that uses fancy packaging, creating an illusion of free choice, to conceal the homogeneity of processed food laced with sugar and palm oil.

Hypermarkets for the era of hyperconsumption

But perhaps the worst impact, although it is more difficult to measure, is the change in subjectivities brought about by the big retail model, which fosters, at the same time as being indebted to, brand hegemony.

People used to go to a shop, ask for what they wanted, and the shopkeeper would inform them about the goods on sale. In the case of the supermarket, the modern-day consumer – characteristic of what French author Gilles Lipovetsky refers to as the era of hyperconsumption – wanders up and down the long aisles full of shelves displaying what looks like a variety of products, about which the cashier knows little if anything at all.

Trust is transferred from the seller to the brand – ultimately, to advertising – and the often limited and nebulous information on labels. This often implies a diffusion of responsibility, because increasing numbers of brands belong to a handful of multinationals that operate with impunity.

We have come to believe that purchasing material objects – or services – is the only way to satisfy our needs; and we have learned to confuse needs and desires. Capitalism relies on eternally unsatisfied people to fuel infinite economic growth. But it is desire that is infinite, not need.

That is why there is no better representation of consumerism than to wander up and down the aisles of a supermarket, where everything is calculated, down to the last millimetre, to push us to buy goods that we do not need but that we come to desire when they are placed in the most eye-catching place on a shelf, surrounded by advertising and colour, in a context where nothing, not even the background music, is left to chance.

Although we may like to think that advertising does not influence us, does not mould our tastes and our desires, its omnipresent slogans have been appealing to our emotions, identity or status, rather than expounding a product’s virtues, for decades.

Consumption has thus become an individual, irreflexive act. But, as Brazilian philosopher Euclides André Mance writes, every act of consumption takes on a global dimension that can turn the consumer into an accomplice to inhumane and ecologically harmful acts. Because, whilst individualism is gaining ground in our societies, the globalised economy makes us increasingly interdependent; and we need to be aware of the unintended consequences of our acts of consumption.

Trends: back into town and the Amazon revolution

In the 1980s, big retailers convinced us that it was more practical to drive to the outskirts of town to do a big weekly or monthly shop at a superstore such as Continente or Carrefour. The hypermarket model has now hit a wall, and big retailers, such as Mercadona, in Spain, are moving back into town, opening smaller supermarkets, selling more fresh and organic products.

At the same time, we have seen the rise of big stores specialising in new market segments: retail spaces dedicated to one company (Ikea, Decathlon) or one sector (Fnac, bookstore chains), or big shopping centres in the image and likeness of the typical US shopping mall, with their chain or outlet stores.

In short, we are going back into town for our grocery shopping and driving to the outskirts for consumer goods previously supplied by independent retailers. An example of the repercussions is that two bookshops are closing every day in Spain.

We had barely grasped the consequences of the big retail model when another technological revolution came along, threatening to change everything, once again. Amazon is the best example of the online sales and home delivery model, which has already spread to the grocery market.

We should perhaps start to look into the potential consequences of this fast-moving process, although it is still in its infancy.