Let's not get too excited about the 5,000 new jobs that Asda promises to create with its programme of new store investment and store refurbishment in the UK. Three new stores are promised for Scotland.
There will clearly be welcome benefits from this investment programme. Building work will create, for a while, much needed construction jobs. Shoppers may be offered more choice and perhaps at a better price and quality as the investment increases competition with Tesco, Sainsbury, Morrison and other large supermarkets.
However, it is unlikely that these outcomes will be the same as what economists call the additionality of the investment. Jobs may be displaced from the other supermarkets, from the high-street, from village grocers and speciality shops. Moreover, the new jobs created in supermarkets may be more likely to be part-time than jobs on the high street. Nobody knows for certain. There is a lack of academic studies in this area. One review of the literature (Sparks, 2000) concludes on the job creation debate
We do not know the answers and indeed the answers should be of little decision-making consequence. .... Claiming superstores 'create' jobs and we should therefore have them locally is not the sole valid planning consideration. Superstores however do concentrate employment and modernise facilities through their efficiency and approach. ... (I)t is understandable if some local authorities and retailers seek to develop such stores in particular areas to improve the locality and to provide a local job focus. They have to recognise however that there will be both positive and negative consequences of this decision.
What economics tells us is that large supermarkets mainly compete for local income. Clearly, their 'local' is a bigger market area than the corner shop. But, by and large, the proposed new supermarkets will be competing for given household spending in a town or travel to work area. This is why one should not expect much net job or, more accurately, work creation. Indeed, as Sparks's notes the efficiency of the supermarket can mean that for a given £1 spent on retail, less labour is required to provide it. When it all works through there may be less work on offer. If so, the consumer may still benefit by lower prices, convenience and greater variety. But it's not the jobs bonanza implied in the media today.
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