Business
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If you happen to be in the picturesque Norfolk town of Swaffham some time over the autumn, you should be able to enjoy the sights, and the local crafts. But if you want a sausage roll, or a steak bake, at least for less than a couple of pounds, you may well be out of luck.
After Greggs applied for permission to open up on the site of a former furniture store – the sort of dismal site that is usually left empty for months before being turned into a charity shop – local residents started up a petition to stop it. Apparently, it might provide too much competition for existing local bakers.
Likewise, the upmarket bakery chain Gail’s – the “posh Greggs” according to its critics – is facing stiff opposition from locals over its plans for an outlet in Walthamstow, north-east London, with hundreds of locals signing a petition to prevent it from selling expensive sourdough in the area.
In the case of Gail’s, many also objected self-righteously to the free market, liberal views of its chairman, the entrepreneur Luke Johnson, as if his politics should be allowed to have anything to do with whether the company is allowed to grow or not.
Meanwhile, the two German discount retailers Lidl and Aldi are facing constant objections to their plans to open new stores, often driven by their rival supermarket chains fearful of losing captive customers with nowhere else to shop. Add it all up, and one point is clear. The UK has turned into an increasingly hostile environment for companies that want to expand.
This is crazy. We all understand that planning rules have to be respected, and there is nothing wrong with local residents having a say in which developments are permitted. Yet it is impossible for an economy to grow if it starts putting limits on the size of its most successful companies.
Greggs and Gail’s operate at very different ends of the market, but the one thing they have in common, apart from selling pastries, is that they have both been a huge hit with customers.
Greggs has grown to an extraordinary 2,450 branches, with a market value of £3.1bn, and a share price that has risen by another 28pc over the last 12 months alone. Gail’s is a private company, but now has over 131 branches across the country, brightening up high streets that would otherwise be increasingly abandoned.
As for Aldi and Lidl, with a market share of 10pc and 8pc respectively they have both shaken up the established grocery chains, and driven down prices across the market. These are the businesses that have been doing well over the last few years.
A growing economy expands through creative destruction. Sure, older companies suffer as they get out-competed by more dynamic, innovative rivals that have come up with a better product or a more competitive price, but that is simply the way the system works. New companies take over from old, declining ones, and, overall, the economy is richer once that process has worked its way through.