More ink on Tesco

Here is coverage from the UK Telegraph on Tesco market entry into the U.S. Very good feature. Here are some highlights:

Tesco's decision to open small convenience stores is bold and, on initial impressions, counter-intuitive. After all, American retailers such as Wal-Mart invented the so-called "big box" pile-it-high-sell-it-cheap retail format upon which Tesco has based its own hugely successful business model at home. That Tesco has shunned this style of doing business in the backyard of its innovators speaks volumes about the way it operates and its appetite for calculated risks.

TK: It would seem Tesco wants shoppers to shop several times per week, but the latest FMI statistics show that U.S. shoppers now go to the supermarket less than 2 times per week. Tesco's foray is truly counter-intuitive and depends wholly on their execution.

More from the story:

Mason believes that Tesco has found an untapped market with Fresh & Easy. The US's west coast is huge and under-served by food stores. California is the country's most populous state with 35m people, equivalent to half the population of the UK. Meanwhile Phoenix and Las Vegas are the fastest growing cities in the US.
More importantly though, "convenience" retailing as we know it in the UK - a small shop selling a wide range of fresh, top-up groceries - does not exist in the US, where a convenience store means a petrol station selling cigarettes, doughnuts and little else

TK: Wait just a sec; don't forget about the brown bananas and the red delicious apples now on display....


In offering a new type of store, Tesco is neatly circumventing competing head-on with the likes of Wal-Mart. Indeed, the whole image that Fresh & Easy intends to project is a world away from the stereo-typical image of the US supermarket as a vast midwest hanger full of shoppers with elasticated waistbands.

TK: The Telegraph takes a shot at the Midwest. We won't forget it.

Its greatest competitors will be smaller chains such as Trader Joe's, which is owned by Germany's Albrecht family, the Aldi owner; and Whole Foods Market, the health food store that opened its first UK branch on London's Kensington High Street last week.
Tesco also has a team of 10 food technicians in the US, helping suppliers develop produce for it. This "collaborative" way of doing business is huge in the UK grocery sector but simply does not exist in the US.

TK: We here in the Midwest with the elasticized waistbands won't see Tesco for a while, but I think the whole world would be shocked if Tesco doesn't experience some serious U.S. growth in the next 15 years.