Tesco licks its wounds after three-year store campaign

It offered to build Darlington Borough Council a new town hall worth £14m, to redevelop a site that had, by common agreement, become something of an embarrassment and to build 130 apartments.

No costs were ever revealed, but that kind of development does not come cheap.

These days, it is common for a retailer to offer a council valuable facilities -most commonly extra parking or affordable housing -to help win planning approval.

The strategy is known as planning gain and is made by way of a legal contract known as a Section 106 agreement.

Such arrangements are often a mutually acceptable way of a town getting "something for nothing". Provided, of course, the planning application is not contentious.

Tesco's added-value offering for its Darlington development was extraordinarily generous; an awesome demonstration of determination to break into a town already served by Sainsbury's, Asda and Morrisons.

Had it gone ahead, the Tesco store would have dwarfed the opposition and that is exactly what the company wanted.

Today, the bigger the store, the better.

Developers have coined a phrase for these extra-large supermarkets; they are known as hypermarkets.

Despite the cost of building big, they still return the greatest profit.

That is why the proportion of floor space nationally devoted to hypermarkets has tripled over the past five years, rising from 8.7 per cent in 2001 to a projected 31.5 per cent by the end of this year.

Tesco's plan for Darlington would have created the largest superstore in the town by a considerable margin.

The site took in not only the town hall, but a little-used bus station, a car park and a derelict area which once housed a row of shops that burned down. It represented almost a quarter of the town centre.

Anxious not to pre-judge the biggest retail development since the Cornmill shopping centre was built 16 years ago, the council launched a major public consultatio.

Although it had been holding informal discussions with Tesco for three years, in some ways the plan could not have been unveiled at a worse time.

Traders in the town centre, and the indoor market in particular, were already unhappy with progress on a controversial pedestrian precinct scheme. The main shopping area was a mess, with temporary barriers, parking restrictions, runaway costs and work being carried out all over the place. The growing unrest brought several businesses together to voice their disaffection.

For many of these, the prospect of a huge Tesco was the final straw. It did not take long for a "Say No To Tesco" campaign to get off the ground.

Opponents predicted that a hypermarket would destabilise the shopping environment. Did Darlington really want a future like Inverness, where Tesco reportedly enjoys a 51 per cent share of all food sales, but still wants to build a fourth outlet?

Tesco says its phenomenal growth is due entirely to demand. After all, once a new store is built, it still requires customers.

And after three years of talks, Tesco bosses must have been confident of success, but they had badly miscalculated.

The offer of a new town hall -and the prospect of local elections next year -made it impossible for the Labour-controlled council to ignore opposition.

When it became obvious there was unprecedented resistance to the idea (even the council's own Mori poll found 76 per cent of people were against it) Labour leader John Williams pulled the plug.

Coun Williams said he was not surprised by the strength of feeling.

He said: "This is one of the biggest schemes put forward in Darlington by a private developer, so it was bound to generate huge public interest.

"Of course, just the name of Tesco always creates strong feelings."

Conservative leader Tony Richmond was more blunt. He said the plans were flawed from the outset, but Coun Williams insisted: "It has not been a waste of time.

"The Tesco proposal was a significant option for what has been a problem site for the council and for Darlington.

"We now need to look ahead and explore alternative options for the Feethams site."

And could that include a different supermarket? Asda development surveyor Barney Harle said the US-owned company was still interested in developing the site.

However, for Coun Williams, it would seem to be a case of once bitten, twice shy.

He dismissed the idea, and said: "We requested more details from Asda and they declined to give them, saying it was not worthwhile. This was not even an Asda proposal; it was just some rough sketches."

Now the authority is looking to something different.

Coun Williams said he hoped to develop the site with plans that "will safeguard the future of our historic markets, so that Darlington will have the thriving, attractive and unique town centre we all want to see."

That is why it has invited local businessmen, the Reverend John Dobson, Area Dean for Darlington, and Darlington Civic Trust to help explore options.

Tesco, meanwhile, is this morning licking its wounds after three wasted years.

Of course, it may still press ahead and, assuming the plan is turned down, launch an appeal that could cost the council hundreds of thousands of pounds if it were to succeed.

Last night, the company was keeping its options open and its opinions to itself.

Perhaps this particular supermarket sweep is not over yet.