Is there a tag in your bag?

"We are concerned with whether Tesco, or any other supermarket, can get into such a strong position, either nationally or locally, that no other retailer can compete."
The Competition Commission

Written in 2005. The gloriously horrendous rise of this aggressive behemoth will be the subject of an extensive follow-up...when I get round to it.

Tesco PLC is the most powerful supermarket chain in the UK . It is listed on the London and Irish Stock Exchange, and holds a 28.1% share of the UK market (for the quarter ending July 2004), up from 26.7% in the same period last year. 1 The giant retailer has significant global operations such as in Eastern Europe and Asia including recent expansions into Thailand and South Korea.

Founded by Jack Cohen 2, who sold groceries in the markets of London’s East End from 1919, the Tesco brand first appeared in 1924 when a large shipment of tea from T. E Stockwell 3 was relabelled with the first three letters of the suppliers name and the first two of Cohens own. The first store was opened in 1929 in Edgware and the company floated in 1947. The first self-service store swiftly appeared in 1948 in St. Albans, and is still trading of 2004.4 The “supermarket” and “superstore” followed in 1956 and 1968 respectively. Until the 1970's, Tesco operated on the 'pile it high, sell it cheap' formula Cohen had imported from the USA. However, the market was changing, leaving the company with slim margins and a serious image problem. In 1973, Tesco decided to try something dramatic and different: to become an ‘aspirational mass retailer’. It discontinued the use of Green Shield trading stamps and launched 'Operation Checkout' which cut prices across the board and started a price war with major market rival Sainsbury’s. Next, Tesco decided to modernise, closing 500 unprofitable stores, and extensively upgrading and enlarging others. At this time, Tesco prioritised the development of large out-of-town stores where parking was convenient, the selection of goods broad, and where a higher volume of business could be generated at increased margins while reducing overheads.5

After a recession the ingenious ClubCard was launched in 1995 - and has run since at no net cost to Tesco, apparently one half of UKPoland, Japan and Turkey. 6 Originally specializing in food, the company moved into the areas of clothing, petrol, consumer electronics, and financial services (including many types of insurance) and is now also an internet and telecommunications provider. By 2003 it had over 2000 stores, including a large number of convenience stores in the UK, employed 326,000 people, and made a pre-tax profit of 1,401 million pounds on a turnover of 21,309 million pounds. 7 adults have one - and shortly afterward the very successful internet shopping service. Tesco has a long record of taking over other chains in a variety of countries, such as

Supermarkets undoubtedly have brought many benefits, yet their dominance of the market has created many problems for those who consider the long term of consumer privacy and capability. Supermarkets have a significant influence over consumers, farmers, communities, workers in developing countries, the environment and the food we eat. The dominance of large supermarket chains affects every area of our lives; there are endless economic, social, environmental and cultural implications for the consumer and provider, even government policies only aim to encourage cheap food at the expense of society and the environment, and are very biased towards the interest of big business.8

The consumer at large remains unaware of the pressing issues surrounding supermarkets. Through aggressive marketing strategies consumers are drawn to Tesco and eventually the local economy becomes dependant on forces beyond its control. According to a report by CorpWatch released in 1997 over 44,000 food shops closed between 1976 and 1989, mostly small grocers and co-ops 9. Tescos also relies heavily on chemically dependant agriculture, the implication being huge energy and pollution costs for producers worldwide as the use of pesticides and herbicides pollutes and erodes soil fertility, destroys ecosystems and are dangerous for the producer and consumer to use. Felicity Lawrence’s undercover accounts of meat packing factories leave little to the imagination, or in the stomach. An extension of this theme is the horrendous cruelty of the disease addled industry of intensive meat, egg and milk farming.

In a bid to prolong the shelf life of all goods, most Tesco stock is wrapped in excessive packaging and many of its stores have a structure of layout that psychologically influences consumer purchasing decisions which give Tesco the greatest profit margin. According to an Ecologist special report 10 in 2004, supermarkets use a huge amount of information on the consumer, which is bought and sold between companies, to predict behaviour and influence decisions. Among these techniques are ‘Eye Level is Buy Level’, BOGOF (Buy One Get One Free) , the smell of fresh baked bread (the Tesco instore bakery is a ruse!), the ClubCard and its ‘benefits’ -customers are divided into categories with whose behaviour they are predicted to conform and rewarded with fake bargains – and celebrity endorsements amongst many others . The recent Tesco ad campaign featuring Prunella Scales, the actress who generates warm feelings of the hilarious Fawlty Towers, was the most successful ever, adding 2.2 billion to Tesco’s profits. Ironically, she was the president of the Campaign for the Protection of Rural England11 from 1997-2002, an interesting fact when taking into consideration that Tesco pays the lowest rate to British farmers out of any of the big retailers.

Tescos power over the UK retailing market, financial services and data collection is undisputable and now versatile but controversial technologies which are a threat to consumer privacy are now available and in use by both the UK and USA supermarkets; these technologies will be eventually implemented by their affiliates and by other companies and services worldwide. One of these developments, Radio Frequency Identification Device (RFID) is an item-tagging technology with profound societal implications. Used improperly, RFID has the potential to develop to jeopardize consumer privacy, reduce or eliminate purchasing anonymity, and threaten civil liberties and individual autonomy.

Radio Frequency Identification Device

The roots of RFID can be traced to 1960’s technology called Electronic Article Surveillance or EAS. These systems used 1-bit tags, with a tag simply detected as either absent or present. By the 1970’s, interest in RFID technology was acquiring a diverse set of uses, from animal and vehicle tracking to factory automation. In the mid-to-late 1990’s, the possibility of using RFID as a replacement for the barcode began to gain ground. RFID has the advantage of enabling automatic scanning; crates or pallets equipped with an RFID tag can be scanned by readers attached to a factory door. Barcodes have to be scanned by hand -- a process that is open to human error. 12

In 2003 Tesco partnered with Gillette and began to test the controversial ‘radio barcode’ technology in a store in Cambridge to track razor blades (the most shoplifted item in Europe).13 Many retailers including Marks & Spencer and Woolworths have expressed an interest in the technology. Leading the pack with Tesco is the worlds largest company, Walmart, owner of UK chain Asda, with US $244 billion worth of sales in 200314 has also begun to implement the next stage in product identification after bar coding, using radio waves to automatically identify items.  According to Garfinkel, a privacy advocate and expert in web security, RFID chips consist of two parts; a tiny silicon chip with a radio antenna which is called the tag, and a gun shaped reader 15(the reader can be built into shelves, doorways etc). Each chip manufactured has a unique code which can be read by anyone with a reader. The tag is stimulated by the low energy radio signal emitted from the reader and once energised the tag submits its identification number. Garfinkel notes that little or no cryptography is employed by RFID systems, which means an RFID identification response has the possibility of being forged. For the manufacturer, it will be possible to monitor where every item is at every moment during the manufacturing process. Powerful computers will be able to provide up-to-the-second reports on what is where and in what stage of creation. With the deployment of RFID technology the checkout at Tesco would be almost instant. Just push your whole cart through the scanner at once, and get a complete list of all products you bought, automatically charged to your credit card.

Currently used by supermarkets to track inventory and deliveries - which has its own benefits - the justification for the trials was to catch and prosecute shoplifters, yet the technology enables the tracking of an individual without their consent, as any product bought has its own unique identifier, and can effectively be linked to all the information available on an individual. In principle, the technology is flawless for business yet the three main concerns with RFID among privacy advocates are as follows

1.     The consumer may be unaware that the tag exists and/or unable to remove it

2.     The tag can be scanned remotely without the individual's knowledge

3.     If a purchase is made by credit card then it is theoretically possible for the unique ID of the chip to be    tied to the identity of the purchaser

RFID provides many advantages - and many problems for future privacy. If it is to be used at product level then there must be a legal requirement for the tag to be disabled at the point of sale.

RFID technology has for some time been used for identification purposes, for example security passes and inventory tracking systems worldwide. However the technology is versatile and is to be fully integrated within the UK market leader, Tescos supermarket, item level16,pending success or an awakening of an apathetic mass, the technology will spread to other areas. Nokia and Mastercard have already announced plans to integrate RFID into their products 17. This is a worrying development in terms of consumer privacy and individual autonomy because the same RFID chips which track products throughout the supply chain may, by extension, track the end consumer without their knowledge. Misuse of the technology- and of the immense database necessary for its success - can be expected as the growth of RFID has occurred outside of the public sphere. The legal guidelines necessary for the security of electronic collection of a mass of information on consumers, whatever the means, do not seem to be in place. In 2004 The Times and Corporate Watch reported that Richard Thomas, the UK Information Commissioner, had expressed his worry about forthcoming expansions in data collection projects. supply chain from 2006 onwards

My anxiety is that we don’t sleepwalk into a surveillance society  where much more information is collected about people, accessible to far more people shared across many more boundaries than British society would feel comfortable with...18

These are the proposed compulsory National ID cards, which could link to any number of databases containing personal details, fingerprints and biometric data of every UK citizen. Proposals currently before Parliament, the population database19 - and the Children’s' Bill 20 have not received any of the small amount of media attention the “Entitlement Cards” have received. We are trading away our identities and privacy for the sake of convenience and low prices. Business and the government hold the opinion that biometrics and RFID are secure and reliable forms of ID, and appear very keen on the idea of iris or retina scans to establish one's identity or, at least, one's uniqueness.

Watching You Watching Me

Everyday life is now subject to scrutiny. There aren’t many places, or activities that are secure from some kind of purposeful tracking, tagging, listening, watching, recording or verification device21, upon which we depend for the efficiency and convenience of all our daily transactions and interactions, whatever they may be. The outcome of the way which we have structured our political and economic models in society for maximum productivity and surveillance. What must be brought to attention are the unintended consequences of technologies like RFID and the likely misuse of the immense databases which accompany them. The collection and processing of personal data, whether identifiable or not, for the purposes of influencing or managing those whose data has been garnered, in this context, can be defined as surveillance. Personal information which can be used to reinforce social and economic divisions, to channel choices and to direct desires, and even, at its sharp end, to constrain and control.22

There are five eventual factors to consider:

• Hidden placement of tags
• Unique identifiers for all objects worldwide
• Massive data aggregation
• Hidden readers
• Individual tracking and profiling

The advanced information infrastructure we live in is growing at an exponential rate, and the surveillance capability of said infrastructure easily outstrips all legal and political efforts to keep up with its social implications. Such is the power of knowledge, and it flows between computer and computer, from business to business and between industry and government. The chips soon to be manufactured inside most ordinary day to day products are invisible, and detectable. According to Tesco’s IT Director, Colin Cobain, 3.5 million tags have already been deployed, and item level tagging is in the trial process. 23

In recent years, Tesco and its major rivals have faced criticism for abusing their monopoly positions and contributing to some of the major social and environmental problems which now plague society. These include exploiting small farmers in the UK and worldwide and hastening their replacements with industrial monoculture plantations where wages are low and labour rights are minimal. Tescos aggressive strategies have involved undercutting almost every other retailer and hence turning our town centres into boarded-up ghost towns; co-operating with climate criminals, Esso 24; as well as numerous other corporate crimes.25

Like many new technologies, there are both benefits and dangers. What's needed is public awareness, and developing the technology such that it meets legitimate needs, while protecting the privacy of end users. For instance, proper labelling that a product contains an RFID tag with the capabilities of that tag, and disabling the RFID tag after checkout. Ultimately, the back-end database systems being proposed for Electronic Product Codes could prove to be far more of a privacy threat to consumers than the RFID tags themselves.

This is only the beginning, respected web publication silcon.com released a report in March 2004 which stated that RFID chipped biometric passports will be enforced from 2015. Civil liberties groups from both sides of the Atlantic have joined forces to oppose the proposed introduction and cross-border sharing of biometrics and RFID in more than one billion passports worldwide. 26 A sociological investigation is necessary and ethical and political action required, before it is too difficult to dissent and capitalistic authoritarian power reigns until the earth finally collapses under the strain of insatiable greed.

Tesco Privacy Policy

Your information may be passed to and used by all Tesco companies. We will never pass your personal data to anyone else, except for any successors in title to our business and suppliers that process data on our behalf. We may also use and disclose information in aggregate (so that no individual customers are identified) for marketing and strategic development purposes.

Our web site may contain links to other web sites which are outside our control and are not covered by this Privacy Policy. If you access other sites using the links provided, the operators of these sites may collect information from you which will be used by them in accordance with their privacy policy, which may differ from ours.

See: http://www.tesco.com/privacy.htm

Additional web resources concerning Tesco PLC

1. Consumer complaints about Tesco broadband internet security package. See: http://www.hie.co.uk/default.aspx?locid=0fib4b006&messageID=18633&isExpanded=False&threadID=18633

2. Tesco sells garden furniture made from illegal Indonesian timber, 2003. See: http://www.foe.co.uk/resource/press_releases/tesco_sells_garden_furnitu.html

3.  UK supermarket giant Tesco is to outsource 90 IT jobs to Bangalore, India. See: http://www.silicon.com/research/specialreports/offshoring/0,3800003026,39122576,00.htm

4. Tesco threatens the livelihoods of many UK farmers. See: http://www.foe.co.uk/resource/press_releases/roll_up_roll_up_to_see_the_18062004.html

5. Tesco faces a consumer backlash over its refusal to stop selling whale meat in its stores in Japan. See: http://www.cetaceadefence.org/index.php?option=news&task=viewarticle&sid=101

6.  Full company profile. See:

http://www.corporatewatch.org.uk/profiles/tesco/tesco1.htm

7. RFID more hackable than retailers think? Slashdot.com article. See: http://yro.slashdot.org/article.pl?sid=04/07/29/0321219&tid=158&tid=172

Bibliography

Garfinkel, Simson. Database Nation- The Death of Privacy in the 21st Century. O’Reilly, 2000

Ed. Goldsmith, Zac. Ecologist, The. Supermarkets-The Naked Truth. September 2004.

Lawrence, Felicity. Not On The Label-What Really Goes Into the Food on Your Plate. Penguin Books, London, 2004.

Lyon, David. Surveillance Society- Monitoring Everyday Life. Open University Press, 2001

Young, William. Sold Out-The True Cost of Supermarket Shopping. Vision Paperbacks, London, 2004.