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Business / Proposed Co-op stores could destroy local shops, retail sector warns

THE LOCAL retail and wholesale sector has expressed “grave concern” after proposals by national retailer Co-op to build two new stores in Sandwick and Scalloway sent shockwaves through the industry. 

Rather than creating 30 new jobs, as claimed by the Co-op, one wholesale company estimates that more than 100 jobs in the local sector are now under threat and could be lost.

Two weeks ago the Manchester-based retailer confirmed it had lodged two planning applications for new convenience stores near the long established Sandwick Baking Company shop, and at the East Voe junction, in Scalloway.

They would come in addition to those currently in Lerwick and Brae.

Rumours that surveyors working for the Co-op had been visiting Shetland over recent months had always been denied, until finally confirmed to Shetland News on 30 March.

Co-op plans £1.2m expansion with new shops in Sandwick and Scalloway

In a recent submission to the local planning authority, Iain Johnston of wholesaler J.W.Gray & Co warned that if “these Co-op stores go ahead many local jobs, businesses and producers will simply disappear”.

Johnston said he had calculated that as many as 123 jobs could in fact be lost should the Co-op get the green light to go ahead with its plans.

“Do not be fooled by the smokescreen of the Co-op,” he said. This is a private business owned and funded by shareholders for profit only.

“Their forward plans for these stores are questionable and give a scent of dominance and monopoly – four stores in Shetland is excessive.”

His sentiments were echoed by Carl Cross of rival wholesaler Hughson Brothers, who said he could see no logic for these new stores.

“Why are they building these there [at Sandwick and Scalloway] if not to destroy those businesses? he asked

“It doesn’t make sense. Why are they not looking at areas where there aren’t any shops rather than trying to put a small community shop out of business?

“They should concentrate on the two shops they’ve got, and try getting back some business from Tesco rather than cannibalising on rural shops.”

Both wholesale companies are likely to suffer a reduction in turnover if the plans by the Co-op come to fruition.

Owners of the Sandwick Baking Company, Evelyn and Raymond Jamieson, said the “economic ripple from these two proposed stores will be felt throughout Shetland” – with takings at tills heading south instead of staying locally.

The Sandwick Baking Company, which runs the shop, employs 30 people at the moment – the same number of roles the Co-op says would be created with new stores in Sandwick and Scalloway.

The Jamiesons – who also own Shetland Freezer Foods – worry that there could also be a reduced need for local bread, and the supply chain to local shops would be affected.

They also warn there could be a devastating impact on Shetland Farm Dairies.

The local dairy co-operative held a board meeting on Thursday morning to discuss the possible implications on its business.

Afterwards, newly appointed dairy manager Chris Shore said the company felt country shops played a vital role in local communities by promoting local produce.

“If the Co-op gets the go-ahead to build these two new shops we will probably see a negative impact on our business, as it is the local shops that stock largely our local milk as opposed to the Co-op that will bring in milk on the ferries,” he said.

“During times of bad weather, which we recently had, you can see supermarket shelves being empty as they rely on milk coming is, whereas the local shops always had supplies of local milk.”

Jamieson added: “The Sandwick Shop supports the Shetland dairy 100 per cent – we have never sold any other milk.

“We are one of their largest customers – if we close or at best try to survive with a much-reduced turnover, the Shetland dairy will then be at high risk of closure.”

Other shop owners in the areas affected were contacted by Shetland News but were either not available or did not return the call.

Claire White of Shetland Food and Drink meanwhile warned that the implications on member businesses including Sandwick Baking Company, Scalloway Meat Company, Bigton Community Shop and Mainlands Mini Market, plus the wider Shetland food and drink sector, could be considerable.

“We will do all we can to make the case for member businesses and local food and drink production more generally as planning considerations unfold,” she said.

A spokesperson for the Co-op said the company had a shown commitment towards local communities and providing an outlet for local produce.

“As a Co-op our priority is to serve and support the local community, providing everyday essentials for those who need them. Our stores help to retain spending in a community which can often benefit other retailers,” she said.

“In addition, we always look to incorporate local produce and we are always evolving this ranging to allow local businesses the opportunity to collaborate with us.”

Plans for the two proposed shops at Scalloway and Sandwick can be seen at the council’s planning website.

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