How fascinating to see how the mindset of an Edinburgh-based company – operating on behalf of a developer keen to build two new Co-ops – argue that there is “absolutely no basis” for the serious concerns of Shetlanders, or officers of Shetland Islands Council, or perhaps even outsiders like me, who have been visiting Shetland with my family for more than 30 years.
They clearly seek to inject the economics of the free market on to an ancient community with a relatively small population – situated one-hundred-plus miles from the Scottish mainland – that has survived intact for more than 4,000 years.
If we took the argument offered for two new Co-ops in Shetland at face value, and especially the developer’s self-confessed “clear aim to promote competition and choice for the benefit of consumers” – then you might just as well have a typical Edinburgh high street re-produced in every community in Shetland.
Investing £1.2 million means the economics of having four Co-op stores in Shetland will help overall profitability for the Co-op because the importation to Shetland of goods for sale will probably be made cheaper due to lower transport costs and will bring unit prices down.
But is it what the consumers of Shetland want or actually need? Might they be happy with the status quo and, at a local level, reject the concept that competition is best?
Maybe these people do know about the economy of Shetland and what the people of the islands, as consumers, actually want?
But surely, if there was a need for the kind of commercial shopping outlets proposed by a developer keen to bring about competition – trust me they would have emerged locally well before now.
If Shetland’s business folk do not know their own islands and its people, then no one does. And there are plenty of smart business people in Shetland with funds to stick up shops all over the place.
Anyone who has studied economics knows full well how competition works. Its chief aim is not to keep businesses competing simply for the sake of competition. That is not how free markets work.
The aim of competing businesses is to gain as much of a market as they can in order to make their own business as profitable as possible, which means the competition has to have lower profits. We see this happening the world over. A developer building new shops is going to be charging a market rent. That rent has to be earned out of the profits any store makes.
But in rural areas the economy is fragile. Often local shops have lower profits than you might expect in a bustling town centre, but one important function they have is to provide a service for local people.
Shetland is Shetland – and it decidedly is NOT Edinburgh, London or New York. The Shetland economy is finely balanced but it works in favour of the people who live there.
Shetland has some amazing business people, who are clearly entrepreneurial. And there is no question that on occasions the arrival of a smart and well developed business from mainland Britain has worked very much in Shetland’s favour – like when Tesco moved in to Lerwick, doubled its size and helped transform the lives of Shetland’s families because they introduced a price structure that allowed them to be profitable, while at the same time widening the range of goods that could be offered on the shelves.
Subsequently the Lerwick Co-op store brightened up its act. Great. But how unimpressive to dismiss local opinion about the long term viability of Shetland’s economy by suggesting two new Co-Ops at Sandwick and Scalloway would “not have a discernible impact on the vitality or viability of Lerwick town centre or on the shopping facilities within rural/village areas”.
Who are these people and what do they know, and how do they know it? This isn’t Edinburgh or Glasgow. I would say Mr. Tommy Coutts’ arguments have considerable merit and that the local councillors should listen to him very carefully.
Perhaps those pushing the argument for greater competition and choice for the consumer ought to try understand the kind of people Shetlanders are.
The impression I have gained over more than three decades is that they are fearlessly independently minded folk. They are, to start with, Shetlanders – not Scottish. Again and again they demonstrate that community means a huge amount.
Of course, a keen and imaginative developer can and should invest in Shetland. For example – look what extraordinary things are about to happen on the island of Unst with the SaxaVord Spaceport, which is going to be at the heart of the new space economy in Europe.
There could be demand for all kinds of businesses and services. What a great place to invest in.