Positive and Negative Effects of Tesco

Topics: Minimum wage, Employment, Wage Pages: 2 (620 words) Published: April 23, 2012
Positive and Negative Impacts of Tesco

Tesco was founded by Jack Cohen in 1919, and grew at a mind-blowing pace, by 1939 there were 100 stores located across the country; since 1990 Tesco has expanded it’s store locations, and selling varieties. Nowadays Tesco is one of the leading grocery and general merchandise retailer chain in the world. Covering 14 countries in Asia, Europe and America. It has a market share of 30% in the UK, and is considered as a monopoly; this has bought negative impacts and positive impacts to society.

Negative Impacts
Tesco fails to pay farmers adequate share of retail price. It benefits from financial economies of scale, therefore they are able to negotiate unfair conditions to pay farmers at a very low price for supplies. According to Competition Commission, Tesco pays farmers 4% less than the average price of other retailers, because of this thousands of farmers and workers are forced to leave the industry every year.

"I get 378 Rand [£32.50] pay every two weeks. I can't afford school fees for my daughter or go to school functions or buy school uniforms" says Tawana Fraser.

Tesco suppliers employs millions of worker worldwide. Using their enormous buying power, Tesco forces factories located in poor countries to lower their price and deliver goods at a faster speed and rate. This demand pressure will then be passed onto factories workers in forms of harsh working conditions (working in hazardous gas etc. ), extremely long working hours and wage cuts. This will inevitably result in more workers like Fraser, struggling to maintain a reasonable standard of life. Homeworkers are also large victims of wage cuts, as their wages are often paid below the national minimum wage.

A research done by Clean Clothes Campaign show serious worker's right violation done by Tesco to garment suppliers outside of UK. “I worry about my security. I don't have job security because we are subcontracted. I am always...
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