News that the ‘Big Four’ major British supermarkets are experiencing massive losses has become so ubiquitous in recent months it hardly seems newsworthy anymore. The most spectacular fall from glory has been Tesco’s – the retail behemoth that, at the height of its market domination, was present in every postcode in Britain and pocketed one in every seven pounds spent in the country. It recently reported a loss of £6.38 billion, the biggest loss in UK retail history. It is currently under criminal investigation by the Serious Fraud Office for fiddling its accounts while simultaneously being cross-examined by the Groceries Code Adjudicator for bullying its suppliers. Meanwhile, Sainsbury’s reported its first loss in nine years to the tune of £72 million, profits at Morrisons were down 52% and Asda recorded its worst performance in 20 years.

While forlorn CEOs scratch their heads and speak in grave tones about their companies’ previously unthinkable free fall, communities and independent retailers who have long struggled against the supermarket monopoly are watching on in satisfaction. Traditional markets, small shops, box schemes, farmers’ markets and food co-ops are thriving and becoming mainstream alternatives to the supermarkets, having been dismissed for years as hopelessly nostalgic or exclusively for a right-on and privileged minority. And for urban customers of modest means who arrive on foot, stores set up by immigrants increasingly look like plausible, budget alternatives to supermarkets. So much so that in gritty Toxteth in Liverpool the L8 Superstore – a sprawling local emporium renowned for its exciting market-style display of fresh fruit and vegetables outside and its United Nations’ of dried goods within – was recently named Food Retailer of the Year in the BBC Food and Farming awards. As owner Abdul Ghafoor puts it, “We have everything here that everyone local needs” from fruit and veg to nappies. Tellingly, last bank holiday weekend local high streets and their small businesses enjoyed a surge in visitors, while footfall at sprawling out-of-town retail parks was down.

Yet it is the German discount supermarkets Aldi and Lidl, not the independent shops, that are credited with dealing the fatal blow to the Big Four and shaking up the food economy. The result is a new breed of shopper – dubbed “promiscuous” by one Sainsbury’s exec for being the kind of people who shop around, buy less at one go but on a more frequent basis, and (shock horror!) visit multiple stores on one outing. But the delinquency of these promiscuous shoppers is still modest, relatively speaking; recent research suggests the average consumer frequents just four separate grocers per month. So, while some consumers are revolutionising the food economy by bed hopping between supermarkets and independents, for most people supermarkets remain a regular haunt.

So is the supermarket model here to stay, or will – and can – British shoppers eventually jump ship altogether? The escalating crisis engulfing the Big Four appears to suggest that the previous success of Tesco, Sainsbury’s, Morrisons and Asda is not due to the emotional loyalty of its customers, but rather to their resigned pragmatism. Simply put, shoppers considered supermarkets to be convenient and cheap, and that was what kept them coming back. You could do a one-stop mammoth weekly shop in industrial hangers on out-of-town retail parks; or alternatively stock up in inner-city ‘metro’ or ‘extra’ shops through the week, dashing in and out as part of a fast-paced urban lifestyle. Opening hours eclipsed those of independent shops and markets, and the chains’ staggering powers of retail acquisition meant they were conveniently located for almost everybody.

Supermarkets may be able to cling on to this notion of convenience, but the myth that they are cheap has been irrevocably shattered. Aldi and Lidl’s ‘everyday low pricing’ has shone a torch on the Big Four’s hefty mark-ups, and the simplicity of the German discounters’ pricing exposed the disingenuous smoke-and-mirrors of the promotions, loyalty schemes and shouty price wars between Tesco, Asda, Morrisons, Sainsbury’s and also Waitrose.

With the illusion of value for money shattered, there seems little to redeem supermarkets other than the convenience of having everything under one roof. Listing all the potentially destructive or unethical features of this dominant food retail model would be a lengthy process. But in brief, supermarkets created a food monoculture in which most people buy and eat the same food across Britain. With their global, long-chain sourcing model, they undermined the age-old cycle of seasonal eating. They were the midwives of the ‘no-time-to-cook’ processed food revolution, which now looks to be a key driver of ill health and obesity. The supermarket business model works on a juggernaut of food miles, and has escalated food and packaging wastage to previously unthinkable levels. Supermarkets also denuded urban landscapes, blighted traditional high streets, put independents out of business all over the country, and bullied their way into communities while creating food deserts.

Arguably the business model of the Big Four supermarkets, as well as the German discounters, thrives on the exploitation of almost everybody in its remit. In-store staff struggle to subsist on draconian zero-hour contracts and minimum wages, while those in overseas factories making clothes, toys and electronic goods receive disturbingly low pay and often work in conditions that would be unacceptable in Britain. The supermarkets’ feudal relationship with their suppliers, and their chokehold on agricultural production is slowly beginning to emerge. One Member of Scottish Parliament described Tesco’s Mafioso-style treatment of its suppliers as akin to “what you see in films like The Godfather”. The only people who have benefited from the supermarket business model as it stands have been CEOs and shareholders, which explains their current acute distress.

Despite all this, will UK shoppers ever go completely cold turkey on their supermarket shopping habit, even as they wriggle out of the shackles of the Big Four? Or is the expectation of finding most of what one needs under one roof here to stay? Amy and Ruth Anslow, founders of independent Brighton supermarket hiSbe, think it is, and instead of creating an alternative they have reinvented the supermarket model. “It is convenient to be able to buy everything in one place,” says Amy, “but what would a better version of that look like, and how would a responsible business behave? We looked at kind of hacking the supermarket model and reinventing it to do something different.” hiSbe stands for How It Should Be, and it sells a wide range of fresh food, groceries and household basics every day from 9am to 8pm. Since opening its doors in 2013, it has turned over its first million.

As a social enterprise, hiSbe is a very different kind of supermarket. It offers its customers the full spectrum of food and groceries with products that are as local, seasonal, sustainable, ethically sourced, animal and fish friendly as possible, and with as little packaging, pesticides and additives as feasible. There is zero wastage of edible food and staff are paid above the living wage. Despite these principles, hiSbe is no wholefood store: it sells everyday and familiar products for people on regular diets – it just goes about it in a better way. Nor is it a preachy and pricier alternative for an affluent and principled minority. Prices – which dwarf all other factors as the Big Four found out to their expense – are kept low at hiSbe by selling fruit and vegetables by weight, working directly with family-run farms in Sussex and selling packaged goods below the suppliers recommended retail prices. With the big supermarkets typically slapping a minimum 30% mark-up on all their goods, customers haven’t failed to notice that hiSbe is winning in the all-important price wars, if only in Brighton for the time being.

It seems unlikely that the majority of British shoppers will emerge from three dark decades of the Big Four’s monopolisation as though it never happened. However, it is worth remembering that seismic shifts in shopping habits do occur. Ten years ago, even the shrewdest retail analysts would not have predicted that the Big Four would be in the poor shape they are now. But for the time being the idea of a food shop that involves multiple stops and a variety of retailers – the butcher, the baker, a farmers’ market – will remain unthinkably inconvenient and unrealistic to many. So perhaps what we need are reinventions of last century’s shopping model, like hiSbe, a prototype for a more progressive style of supermarket that can co-exist harmoniously alongside Britain’s increasingly dynamic alternative food economy.

Photograph: Nic Taylor

Sign up to our Newsletter

Stay up to date with the latest SFT views and news