Memorandum by Geraud Markets (UK) Ltd
You may not be aware but Geraud Markets UK Ltd is
the main sponsor of the National Association of British Markets
Authorities (NABMA) which is one of the primary stakeholders in
the Retail Markets Alliance (RMA). We have a very close working
relationship with the organisation's principle officers with whom
we consult on a regular basis. Our company's own principle, Monsieur
Jean-Paul Auguste, is also likely to be asked to support any delegation
which may be invited to represent the industry at future meetings
with the Select Committee. Monsieur Auguste is also the incumbent
Chair of the Retail Sector of the World Union of Wholesale Markets.
Whilst we will continue to play an active role in
promoting the industry's joint response to the Select Committee,
together with our colleagues in NABMA we have concluded that it
may be helpful to the process if we were to submit a separate
document in support of the main submission based upon our own
experiences as Europe's largest private sector market operator.
Geraud Markets is uniquely placed to provide a private
sector perspective by drawing upon its extensive experience of
commercial market operations and joint public-private sector partnerships
in the UK, France and several other European countries. Since
its foundation in 1880, we have specialised in the development
and regeneration of community retail markets, building an association
with over 300 local authorities for whom we manage in excess of
1,500 markets each week through 600 separate contracts. We are
proud of the fact that some of those contracts have continued
through the entire 129 years of the company's existence. It is
perhaps no coincidence that since its foundation, the company
has remained in the same private ownership of the Auguste family.
The experience we have gained in the creation
and regeneration of local authority markets is, we believe, unique
amongst European market operators and something which could add
value to the work of the Select Committee. Geraud Markets UK Ltd
(GMUK) is the UK arm of Groupe Geraud and whilst GMUK Ltd has
acquired a number of wholly-owned business interests, we still
believe very strongly that the management of community based retail
markets is our core activity.
Since 1999, when the company was established
in the UK, GMUK has grown to become the country's leading private
sector market operator. In 2003, we established with Liverpool
City Council, a ground-breaking joint venture partnership. Six
years later, Geraud Markets Liverpool Ltd (GMLL) remains the UK's
only public-private sector joint venture market operating company,
managing nine of Liverpool's indoor and outdoor retail markets
plus the city's Wholesale Fruit & Vegetable Market. In that
time, GMLL has overseen a dramatic reversal in the financial performance
of the city's markets portfolio. Prior to the company's involvement,
the City Council's markets were operating at a significant annual
deficit. However, within four years of the company becoming responsible
for the strategic and operational management of the portfolio,
that deficit was eliminated and an aggregate profit of over £1,000,000
realised. Major initiatives currently being progressed in the
city include the relocation of the city centre Charter Market
in St Johns Centre to a new purpose-built location, the relocation/redevelopment
of the Wholesale Market and the redevelopment of the city's oldest
street market, Great Homer Street.
Our other local authority contracts include
Allerdale, Clevedon, Swadlincote and most recently Ipswich, where
the revival in the town's market since we assumed control in September
2007 has exceeded both our own and we believe also our partner,
Ipswich BC's expectations.
In the UK, a wholly-owned subsidiary of GMUK,
InShops Ltd, comprises 40 centres from Aberdeen in the north to
Chatham in the South. Our combined UK operations employ 250 people
and generate income in excess of £22m per annum. InShops
is an entirely private commercial venture which has reinforced
the company's experience and expertise in the UK's extremely competitive
In the context of Geraud Markets UK Ltd's contribution
in support of the main RMA submission, it would be neither appropriate
nor feasible to provide an exhaustive account of the company operations,
experience and philosophy of markets management. However, it is
perhaps particularly appropriate to include a brief reference
to certain key areas as "headline" discussion points
which could be explored in greater depth, should the members of
the Select Committee so wish.
The principle underpinning the company's philosophy
and approach to each and every one of its public-private associations
is one of true "Partnership". Whilst the structure of
the company's relationships vary from simple management contracts
to full Joint Venture Companies in which both parties are shareholders,
the relationship is always based on openness and transparency
and the key to sustaining that relationship, communication, is
invariably conducted in a spirit of mutual respect for each other's
Whilst we and our partners recognise that as public
and private sector organisations, we are subject to different
and occasionally conflicting constraints in the delivery of our
respective objectives, we also understand that each party has
an equally important and valuable contribution to make to the
relationship and that the key to sustaining that partnership is
to ensure that we establish an agreed set of key objectives and
an agreed strategy as to how those objectives will be delivered.
We believe, and our extensive experience in
partnership with numerous local authorities demonstrates that
whilst the public and private sectors seek to achieve a mixture
of social, environmental and economic objectives, these need not
be mutually exclusive and with appropriate planning and consultation,
it is entirely possible to satisfy the aspirations of both parties.
Geraud Markets UK Ltd is a commercial market
operator. However, whilst the company needs to achieve a financial
return on its investments, short-termism and profit maximisation
are not principles which our organisation advocates. Our approach
recognises and values the important role of all stakeholders in
delivering popular and sustainable market operations. If we are
able to provide a service which customers enjoy and continue to
support, market traders will be attracted to and benefit from
the buoyant trading conditions. The local authority in turn will
enjoy the benefits of a thriving alternative retail offer. If
we succeed in satisfying each of the stakeholders' aspirations,
our own commercial return will inevitably follow. Our reward is
a consequence of delivering our partners' objectives.
Public-private sector enterprise is our core
business and our company is, we believe, unique in having developed
long associations based upon our ability to meet our partners'
aspirations to create vibrant and sustainable community based
In relation to the Select Committee's remit,
our approach is perhaps best illustrated by two examples of how
partnerships can be structured very differently to achieve the
objectives of the stakeholders.
The first example which is mentioned earlier
in this document is the joint venture company which was created
in partnership with Liverpool City Council (LCC). For statutory
reasons, LCC's shareholding in the JV Co is limited to 19.9% with
GMUK holding the remaining 81.1%.
Whilst LCC holds the minority shareholding,
a schedule of "Reserved Matters" was incorporated into
the contract and Board approval on these matters must be unanimous.
In effect, through a "Golden Share", LCC is able to
exercise a degree of control which is disproportionate to its
The second example is our relationship with
the London Borough of Southwark (LBS) which in contrast to the
structured legal relationship of the Liverpool partnership, is
based upon a very loose, informal arrangement.
In September 2007, LBS invited GMUK to assume
responsibility for its Street Trading Section. The initial interim
contract period of three months has been extended until July 2009
(potentially 2010) to allow the authority to undertake a fundamental
review of its Street Trading Service. Members of the Select Committee
will be well aware that unlike the provinces, markets within the
capital are governed by the London Local Authorities Act 1990
(LLAA). There are particular provisions within that legislation
which govern the management of markets within the 31 London Boroughs
and Westminster which do not exist elsewhere in the UK. It is
interesting to note that GMUK has successfully managed the Borough
Council's markets for a period of 17 months without LBS delegating
any of its statutory powers to GMUK's staff. In reality, the management
of the Council's markets portfolio has been achieved without the
benefit of regulatory powers provided by the LLAA 1990 and which
all London Boroughs no doubt consider indispensable to the effective
management of their Markets Services.
Our relationships with Liverpool and Southwark
illustrate the point that whilst one is based upon a very clearly
defined, legal structure and the other is a much less formal arrangement
with no written contract, both suit the individual circumstances
and both have achieved the objective of providing an effective
management structure which is capable of realising the respective
authorities' objectives. In Liverpool, where we enjoy a long-term
relationship of 15 years with an option to extend for a further
period of up to 10 years, we are able to take a long term view
and develop proposals which complement the city's own regeneration
initiatives. In Southwark, where our tenure is much shorter, we
are still able to provide the same efficient operational management
support. In both instances, our role is specifically designed
to fit the individual sets of circumstances prevailing in that
No two markets are identical. Social, economic,
and demographic factors influence the nature of the market offer.
The location and physical constraints of the site determine the
scale and configuration of the operation. Political support or
opposition from various groups combine with other considerations
in an endless permutation of variables to determine the unique
nature of each market.
One of the main advantages which markets enjoy in
an increasingly innovative and competitive retail sector is the
speed and flexibility with which they are able to respond to often
very rapidly changing consumer preferences, shopping patterns
and numerous other factors which impact upon the industry. The
uniquely close relationship which market traders enjoy with their
customers provides them with an understanding of the consumer
which High Street retailers and national multiples by the nature
of their management structures and scale of operations, find difficult
Whilst there is no magic wand nor prescriptive
formula which can guarantee the viability or sustainability of
a market, if the experience and expertise gained in 129 years
in the industry has taught us anything, it is that the inclusion
of the views of all stakeholders in translating a vision into
a bespoke strategic and operational management plan, is essential
to ensure that whatever potential may exist for that market, is
The final point to make on this subject is that
successful and sustainable markets are not achieved overnight.
They need to become embedded in the social and commercial fabric
of the town or city. Only when a strong local identity has been
established will a genuine sense of ownership develop amongst
the local community. It is this sense of ownership which is the
essential element in ensuring the long term sustainability of
Whilst the most visible sector of the markets
industry is community retail markets, it would be wrong to overlook
the importance which wholesale markets play in the supply chain.
Indeed, wholesale markets are the hub of the fresh produce industry,
underpinning the most fundamentally important elements of every
Fresh produce traders are the "anchor tenants"
of any general retail market. However, the extent to which the
large supermarket chains have begun to dominate the retail sector
over the past 25 years has seriously undermined the ability of
traders in fresh produce to compete. A modern, thriving, national
wholesale market network is essential to supply traders who are
required to service a generation with increasingly more sophisticated
tastes, demanding of ever wider choice and better quality.
Whilst any detailed analysis of the relevance
of wholesale markets and their importance to the commercial activity
of cities and regions throughout the UK is clearly beyond the
scope of this document, it is perhaps worth including the briefest
of references to our European connections.
Our own company commissioned a very detailed
study from colleagues in Rungis, Paris which is generally acknowledged
to be Europe's premier wholesale market. That study provides important
evidence from leading European experts in the fresh produce industry.
We believe that it would be of interest to members of the Select
Committee and could be made available, if required.
Our vision for the wholesale markets in Liverpool
is to create an integrated food hub which includes:
Wholesale Fruit Vegetable and Flower
Food Preparation and Processing.
Related and Ancillary Commercial Activities.
The benefits from the vertical integration of
the fresh produce supply chain not only provides commercial and
logistical advantages for those involved but there are obvious
environmental benefits from the reduction of food miles and the
consequential reduction in carbon emissions.
Inevitably, improved efficiency in the supply
chain results in benefits for the end user. Healthy eating and
other socially desirable food related initiatives all become more
achievable as a result.
A final point which the Select Committee may
wish to have regard to is the increasing popularity of Farmers,
Continental, Christmas and other speciality markets throughout
a difficult period for the markets industry as a whole.
Our company's Special Events Division operates an
extensive and very successful programme of events throughout the
UK and last year we piloted a number of International Street Markets
in Stockholm and Copenhagen. Such was the success of those events
that a programme of over 20 markets is being developed for 2009
in response to the interest generated amongst other Scandinavian
towns and cities.
In an age of increased mobility where the barriers
to economic migration are becoming fewer, a demand for increasingly
more diverse and unusual products is developing. Speciality Markets
are perfectly suited to satisfy that demand and we believe that
this trend will continue in spite of the present challenges facing
The growth and popularity of food based speciality
markets underlines the opportunity and indeed requirement for
a proactive approach to encourage into the industry the next generation
of traders to satisfy the increasingly sophisticated tastes of
the modern consumer. The role is not exclusively that of the private
or public sectors but is best achieved by a multi-agency approach
where central and local government creates the necessary framework
in which the private sector can use its experience and expertise
to implement a holistic solution which addresses the structural
problems within the industry which have been largely overlooked
for too long.
As we have already stated, this document is
intended to support the main submission of the RMA by providing
a personal perspective of the markets industry in the UK and Europe
from our own experience as commercial market operators, albeit
with extensive involvement with the public sector.
We have attempted to do no more than provide
an understanding of our company's ethos and to raise a limited
number of keys points which we believe are relevant to the work
of the Select Committee.
If you feel that you would like to discuss the
matter further, we have no doubt that Monsieur Auguste would be
delighted to meet members of the Select Committee and we are sure
that as the head of Europe's largest private sector market operator,
his personal contribution to the process would be invaluable.