ASA Adjudication on Tesco Stores Ltd

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A circular, for Tesco, was headlined "OUR PROPOSAL FOR A NEW SUPERMARKET IN MANNINGTREE". Text underneath stated “Earlier this year we submitted a planning application to Tendring District Council to build a new supermarket on the edge of Manningtree Town Centre. We thought it was time to update you on our plan.” It went on to discuss Tesco's plans to open a new store in the area and made a number of claims about the environmental and socio-economic benefits it would bring. A diagram labelled "Expenditure leakage" was used to demonstrate where local residents travelled to do their food shopping. It showed Manningtree, Lawford and Mistley in the centre with arrows leading away to the nearby towns of Ipswich, Colchester, Harwich and Clacton. Text on the reverse of the circular stated “What do you think? Tendring District Council may decide on the application this autumn. There is still time to let them know what you think. Write to them at: … Or email …”.

Issue

The complainant challenged whether:

1. the claim "There is a need and demand for a new food store to serve the Manningtree / Lawford / Mistley area ... ", because he believed most respondents to a survey by Tesco said it was not needed;

2. the diagram titled "Expenditure leakage" and the claim "This is expenditure that should stay in Manningtree" misleadingly implied that money spent at the Tesco store in Manningtree would benefit Manningtree.  He argued that expenditure in the store would not be re-invested in the area;

3. the claim "Over 200 full-time and part-time local jobs will be available ... ", because he understood the number was actually 100;

4. the claim "All this results in travel distance savings of over 60%.  That's nearly 8 million kilometres ... Our scheme will mean ... about 1.6 million tons less carbon emissions" was misleading and could be substantiated.

CAP Code (Edition 11)

Response

Tesco disagreed that the circular constituted advertising material for the purposes of the CAP Code.  They believed it was public relations material produced to inform the public about the proposed Manningtree store and the planning process.  They explained that the planning process required them to include widespread local publicity of the development.  Tesco said it was therefore common for developers to organise public exhibitions and produce literature to inform communities about their proposals and encourage public participation.

1. Tesco said the need and demand for a new food store in Manningtree was assessed according to a number of factors: existing shopping habits of Manningtree residents; anticipated future shopping habits; the availability of existing facilities; growth in the area's population and associated expenditure; and residents' views; and the ability to comply with Government guidance encouraging more self sufficient / sustainable communities.

In support of the claim, Tesco submitted a newspaper article and a letter from a local resident that expressed support for the opening of the store.  They also submitted relevant extracts from a telephone survey prepared by a market research company in May 2006.  Respondents were asked if there were any new (or improved) types of shops that would be useful in Manningtree:  8.6% (38 of 440 respondents) replied "supermarket" and 65.9% (290 respondents) replied "Don't know/none".  Of the 8.6% who believed a supermarket would be useful in Manningtree, 52.6% (20 respondents) cited Tesco as the supermarket operator they would like to see in the area; 49.5% (218 of 440 respondents) cited convenience to the home as the primary reason for the destination of their main food shop.

Tesco also submitted a report prepared by a town and planning consultancy in June 2008, which based its report, in part, on the results of the telephone survey.  It concluded "The results of this extensive, comprehensive telephone survey indicate strongly that there is a clear need and demand for a new food store in Manningtree town centre ...".   

They pointed out that the criteria applied when assessing need in planning terms was much broader and more detailed than just assessing local residents views.  The claim "There is a need and demand for a new food store to serve the Manningtree / Lawford / Mistley area ... " had not been based solely on local residents views.

2. Tesco disagreed with the complainant's interpretation of the claim, "This is expenditure that should stay in Manningtree".  They pointed out that it was preceded by a sentence which stated "About 80% of local residents travel to Ipswich, Colchester, Harwich or Clacton for their main food shopping".  Tesco believed, in that context, the claim would be understood as meaning that expenditure should be drawn back to the local area from out of town, in accordance with Government policy which promoted self-sufficient or sustainable local communities.

Tesco said the benefits of that expenditure being drawn back to Manningtree were considered in the report by the town and country planning consultancy.  It stated that the proposed store would generate considerable activity within the town centre with spin-off benefits for its shops and other businesses.  The report used the effects of the opening of a Tesco store in a different town to support its conclusion: the town had enhanced its role as a centre for main food shopping for people living in the area; there was a dramatic change in location of shopping in favour of the town centre; the town became more important for main shopping for those living further away; the use of other shops and services in the town centre significantly increased due to 'linked shopping' and the town was also used more for comparison goods shopping.  There was also evidence to suggest that for every £1 spent at the Tesco store, at least another 50 pence was spent on linked shopping for comparison goods.

The report also stated "if a town centre has good facilities for 'main' food shopping, to provide additional incentive to visit, then the market for comparison goods shopping expands to the benefit of existing shops and stimulating the formation of new businesses".

Tesco believed the report supported the idea that expenditure leakage should be drawn back to Manningtree for the benefit of the town.

3. Tesco supplied a document titled "Employment and Store Figures" which estimated the number of jobs a store would generate based on its size.  The document was based on Tesco's experience in determining staff levels across their stores and they asked us to keep the details confidential.  They explained that by referring to the square footage of the Manningtree store in the document, they could determine the number of full and part-time jobs that would be needed.  Tesco therefore believed the claim "Over 200 full-time and part-time local jobs will be available ..." had been substantiated.

4. Tesco supplied a report by a transport planning consultancy, dated May 2008, which examined the distances customers travelled before and would travel after the new store opening.  The consultancy used the data gathered in the telephone survey and the report by the town and planning consultancy to determine the number of annual food shopping trips (main and 'top-up' shops), current travel patterns and, following the opening of the proposed store, the number of diverted trips to the new store from existing stores.

Tesco said the methodology used for the travel distance assessment was based on a tried and tested method of comparing the difference between the distance travelled from pre-determined areas to currently used stores with and without the proposed new store.  Tesco provided an explanation of the methodology and the calculations.  The transport planning consultancy report concluded that there would be a travel distance saving of 9.5 million kilometres annually, which equated to an approximate 67% saving on travel distance of the new Tesco shoppers compared with their existing trips for food shopping.  The figures of eight million kilometres and 60% quoted in the circular were therefore underestimates.

Tesco explained that, using the travel distance saving of 9,543,706 kilometres, it was possible to calculate the amount of carbon emissions that would be saved if the store proposal was successful.  The Society of Motoring Manufacturers and Traders' (SMMT) New Car Report set out the average CO2 emissions of new cars in the UK.  Tesco used the 2007 average emission figure of 164.9 grams per kilometre. They sent the SMMT 2009 report which confirmed the accuracy of that figure.  Using the average CO2 emissions and the travel distance saving, Tesco believed a saving of 1,573.8 tonnes of CO2 would be made if the proposed store went ahead, or 1,600 tonnes when rounded up.  Tesco did not believe rounding up in that way would misrepresent the CO2 saving; the average CO2 emission figure was based on new car data and, as new cars were not as polluting as older cars, the CO2 saving was underestimated.

Tesco explained that human error meant that the CO2 saving was misquoted in the leaflet as 1.6 million tonnes instead of 1.6 million kilograms or 1,600 tonnes but believed they had nevertheless substantiated the intended claim.

Assessment

The ASA noted Tesco's views with regard to the applicability of the CAP Code to the circular.  We considered that the circular sought to affect readers' perception of the benefits of a new store and sought to convince them not to object to the planning proposals.  We concluded that it was subject to the Code.

1. Upheld

The ASA noted 38 (8.6%) of 440 people surveyed by telephone in May 2006 believed a new supermarket would be useful in Manningtree, and 20 of the 38 cited Tesco as the supermarket operator they would like to see open a store in the area.  We understood that the town and country planning consultancy had used the telephone report to draw the conclusion that there was a need and demand for a new food store in Manningtree.

We noted a number of factors had been taken into consideration in assessing the need and demand for a new food store in Manningtree.  We considered, however, that readers were likely to infer from the claim that local residents had been surveyed and the majority had indicated that they wanted and needed a new food store.  We noted only 8.6% of respondents to the telephone survey believed a new supermarket would be useful.  We considered Tesco had failed to substantiate that there was a need and demand for a new food store to serve the Manningtree/Lawford and Mistley area and concluded that the claim was misleading.

On this point, the circular breached CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness).

2. Not upheld

We noted the diagram titled 'Expenditure leakage' sought to visually demonstrate that "... local residents travel to Ipswich, Colchester, Harwich or Clacton for their main food shopping." and that "This is expenditure that should stay in Manningtree."  We considered that readers were likely to infer that those local residents who visited other areas to do their main food shopping would be more likely to shop locally if a Tesco store was built in Manningtree and that Manningtree would therefore benefit.

We noted the circular also stated "A new food store will make Manningtree a more attractive shopping destination and support retail confidence.  Three hours of free parking will allow ample time for shoppers and visitors to enjoy the town.  This will stimulate existing High Street shops and encourage new spin-off businesses."  We considered that, in that context, readers would recognise that the circular referred to those indirect benefits that the presence of a Tesco store in Manningtree would bring.  We did not consider that the circular implied that Tesco would re-invest money spent in the store in the local area, as the complainant believed.  We concluded that the claim was acceptable.

3. Not upheld

We noted from the evidence that the number of jobs expected to be created, according to Tesco's "Employment and Store Figures" document, was well in excess of 200.  We therefore understood that the circular understated the number of jobs likely to be created and concluded that the claim was acceptable.

On points (2) and (3), we investigated the circular under CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness) but did not find them in breach.

4. Upheld

We noted the travel distance saving of over 60% was calculated by reference to the data gathered in the telephone survey and the report by the town and planning consultancy.  We noted the transport planning consultancy had used data for primary trips (home to store to home) only and had not included pass-by and diverted trips, because they believed the change in travel distance created by those trips was minimal.  The report explained that it was impossible to define the precise length of each trip made and an approximate assessment was therefore made using retail assessment zones.  We therefore understood that the methodology used to calculate the distance savings included a number of approximations.

We noted the circular inaccurately quoted the resulting CO2 saving as 1.6 million tonnes instead of 1.6 million kilograms or 1,600 tonnes, which we understood arose as a result of human error.

We considered that readers were likely to interpret the claim as a factual statement capable of objective substantiation.  We understood, however, that it was based on estimates.  We considered that the circular should have made that clear and concluded that the claim was misleading.

On this point, the circular breached CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness) and 49.1 (Environmental claims).

Action

The circular must not appear again in its current form.  

Adjudication of the ASA Council (Non-broadcast)