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Local and global reputation of British grocer Tesco at odds

It has created a socially responsible image in California, its newest market. But abroad, it is likened to Wal-Mart.

August 02, 2007|Jerry Hirsch | Times Staff Writer

In California, giant British retailer Tesco is carefully cultivating an image as a socially responsible grocer with good-paying jobs, fresh organic foods and the latest in environmentally friendly technology.

But the firm's new Fresh & Easy Neighborhood Market chain, due to open here this fall, is a far cry from the Tesco flagship stores in Britain, where the vast supermarkets are more like Wal-Mart in size, selection and controversy.

To prove its green credentials, Fresh & Easy adopted a baby elephant in Kenya, it roofed its Disneyland-sized distribution center in Riverside with solar energy arrays and will use a polar bear as a corporate symbol to remind people of global warming. Workers will start at $10 an hour and get health insurance.

Internationally, however, Tesco has come under fire for the decapitation of live turtles at stores in China, alleged purchases of sweatshop goods from Bangladesh and unfettered expansion in England that is driving small shops out of business.

"Tesco has been especially adept at marketing itself as a socially responsible corporation," said Robert Gottlieb, an Occidental College urban policy professor. "Its track record has significant gaps between what it has promised and how it has achieved its current position as one of the top multinational operations."

Gottlieb's Urban and Environmental Policy Institute plans to issue a report today that will offer communities recommendations on how to deal with Tesco. He warns that the small Fresh & Easy stores are only a beachhead. He said Tesco was seeking to make it U.S. business "as massive" as the company's presence in England.

Tesco rejects the criticism and dismisses any comparison between its efforts in the United States and controversies around the world. It is "unfair to suggest our statements about our planned business in the U.S. are not genuine by picking a handful of isolated issues that have occurred around the world over the past few years," company spokesman Greg Sage said.

With about $80 billion in annual sales, Tesco is the world's third-largest food retailer. It is spending $2 billion to build what will probably be hundreds of small grocery stores in Southern California and the Southwest. The first Fresh & Easy markets will open in November.

Tesco's California marketing strategy is calculated to create a "touchy feely" image that "goes for the heartstrings," said Mohan Sodhi, a management professor at City University in London. In England, Tesco is about low prices, creating the type of negative publicity and images that Wal-Mart Stores Inc. faces in the United States, Sodhi said.

Company spokesman Sage said Tesco had addressed the treatment of turtles. He said the company has "carried out extensive research" over the last year and has changed the way it slaughters live soft-shell turtles. Tesco employees now crush the turtle's head after removal, to end any lingering suffering that might be felt by the animal.

"Finding a balance between the very important issue of animal welfare and the attitudes and traditions of other countries is not always easy, but nonetheless we have made some real improvements," Sage said.

But the turtle issue and other criticisms are likely to follow the company as it opens its Fresh & Easy stores here in Southern California, consumers say.

Arrissia Owen Turner, who was looking forward to shopping in Fresh & Easy stores near her home in Ontario, said how the company treated animals and workers in other nations would influence her shopping habits.

Just because something is acceptable in one culture or tradition doesn't make it right, Owen Turner said. "I don't go to Wal-Mart because it doesn't give a livable wage and good benefits to its employees."

Elsewhere, Tesco faces criticism for the working conditions at some of its suppliers.

ActionAid, a South Africa-based anti-poverty agency, has repeatedly urged Tesco to improve working conditions for South African fruit pickers that supply the retailer.

At the company's annual meeting in June, Gertruida Baartman said there had been little improvement in the working conditions for agricultural workers like herself.

"I am here again because things haven't changed in our lives. Our children still go to bed hungry, and we use pesticides with our bare hands," said Baartman, who earns about 75 cents an hour for the fruit that winds up on Tesco's shelves in Europe.

In response, the company said it planned to expand ethical audits of South African farms.

According to War on Want, another anti-poverty group, workers in Bangladesh are paid about 10 cents an hour to produce clothes for Tesco's British stores. The group said employees at one plant in Dhaka work "up to 20 hours a day in locked premises."

Sage defended the company's record in Bangladesh, saying it had done all it could "to ensure that high standards and good conditions are maintained by the most thorough independent audits carried out anywhere in the world."

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