Deprived communities pay the price for Tesco's rescue plan

With a Wolverhampton site among 49 scrapped stores, Hannah Fearn speaks to locals angered by the announcement

Dave Lewis became CEO of Tesco last September (PA)

Jasper Singh took over the Dartmouth Arms in Wolverhampton’s rundown All Saints area three years ago believing that the neighbourhood would change. Just around the corner the redevelopment of an old hospital building was underway, and with plans for a huge Tesco store at its heart, the 56-year-old publican had every reason to be optimistic about new trade coming to the area.

Now there is a gaping hole in those plans, as the site has been named as one of the largest to be abandoned by the troubled supermarket chain.

“It would have given people employment around here. It would have been good for my business. I bought [the pub] because I thought Tesco would come and there would be a lot more people,” Mr Singh said. “It’s bad for the city. The supermarket was necessary.”

Tesco chief executive Dave Lewis announced a rescue plan for the company on Thursday which included the closure of 43 existing shops and the cancellation of 49 proposed stores. Mr Lewis admitted the decision had been “very difficult”, but the communities left behind are furious at the way they say the organisation has treated them.

Though often opposed in relatively wealthy areas, more deprived communities have welcomed plans for large Tesco sites, which bring with them hundreds of jobs and a boost to local economies.

The site of the old Royal Hospital, which was being developed by Tesco (Andrew Fox)

After it was revealed that plans for a new store in Dartford would be among those axed, Dartford’s Conservative MP Gareth Johnson said Tesco had treated his Kent constituency in an “appalling manner”. And the shelving of seven proposed stores in Scotland was described by Aberdeenshire council as a “massive disappointment” to local people.

In Wolverhampton, Tesco had owned and sat on the large city-centre hospital site for 14 years. Pat McFadden, Labour MP for Wolverhampton South East, said the store was expected to create 500 jobs and spark the regeneration of All Saints.

“The community strongly backed the development, the council backed it and I backed it. It was wanted all along,” he said. “It’s ridiculous that they have sat on this land.

“A kid who started school when they bought the land would be in university by now. It’s also a clear breach of a promise made personally by the UK managing director of Tesco less than a year ago in my office. He looked me in the eye and said we will build.”

Mr McFadden described the decision to walk away as “shocking corporate citizenship,” and called for the Government to look again at the rules which allowed large companies to “landbank” civic sites without developing them.

“I think these are issues that must be looked at now,” he said. “This was a major redevelopment of strategic importance to the whole city. Tesco is a company whose promises can’t be believed.” The MP has requested urgent talks with the supermarket chain about the future of the site.

Sati Lyall, who works at the nearby Sewa Centre – which provides advice on benefits, immigration and employment to local people – said she was shocked at the decision.

Tesco had owned and sat on the large city-centre hospital site for 14 years (Getty Images) (Jeff J Mitchell | Getty Images)

“It’s dreadful. This is one of the most deprived areas in Wolverhampton. They have been doing the area up, building new houses. But they have just closed a local Sainsbury’s – they have moved to the other side of town, I think because of the competition from the new Tesco – and now there is nowhere we can go.”

Mr Lewis said: “I know that this news will be a real disappointment to many people in the local community. I am very aware of the importance of the site to the area and I am determined that we will work closely with [the council] to find the right solution for the local community.”

He added: “Our performance as a business has fallen significantly short of where we would want it to be and my absolute imperative has to be to protect the future of our business.”

As for Mr Singh, he affirmed he will still hold on to the Dartmouth Arms in the hope of better times ahead.

“I will keep the pub. The business is not brilliant but I pay my mortgage and I pay my rates.” And what should become of the old hospital? “I want more people round here so I think it should be [made into] houses or flats.”