Indicator 4.4

The multiplier effect - Commitment to local services and the community

Supermarkets' highly controlled and centralised decision making processes mean that all stores tend to employ the same companies for the bulk of the services they require such as cleaning, printing, maintenance, legal and accountancy. As noted, research shows that the advent of a new supermarket means job losses and the deskilling of the local employment pool. It is suggested that decentralising the decision making process to the individual store level would mean that store managers could choose to employ local financial and other services, hence supporting the local economy.

This indicator also measures direct financial support and in-kind contributions from local stores to community work and local charities. This is an area of interest to many of the major multiples as it provides a strong link with their local customer base and opportunities for raising their brand profile.-not sure about this one though.

We would expect progress on this indicator to include decentralised spending process on financial and other services to enable store managers to place custom with local businesses. This would be combined with a process of training for store managers to enable them to make local-friendly spending decisions. The issue of funding in the local community is relatively straightforward and we would want to see increased spending on local community initiatives combined with staff being authorized and encouraged to get involved in the community in company time.

Indicator: There is no indicator in this area this year

There may be problems with this indicator in that decision-making on spending is likely to be so centralised that store ratings may be zero every time (except perhaps the cleaning contract). Even if the process were to be decentralised, store managers may well go for large nationalised services, as these are the ones they recognise. It will be difficult to get any independent verification of the results of this indicator. As mentioned, NEF has made some attempts to calculate the indirect effect of retail expenditure on the local economy, which provides a useful guide, but it would be highly resource intensive to do an empirical study on each of the 10 supermarket chains.


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