Where the subject may be perishable
but the insight isn’t.

Tesco Round-up

As the king of the United Kingdom’s food retailers prepares to open stores in America, we’ve paid close attention to its operation:

Tesco Challenges kicked off our coverage of Tesco’s proposed American venture and pointed out that there are major obstacles to be overcome. 8/15/2006

Tesco, Part II included input from a letter-writer deeply involved with Tesco in the U.K., testifying to Tesco’s high food safety standards, intensive consumer focus. However, we also pointed out that Tesco’s plan for a rapid roll out was a “brilliant or bankrupt” strategy. 8/16/2006

The End of Supermarkets pointed out that if Tesco’s concept -- heavy to perishables and prepared foods – became the preferred way for consumers to buy these items, it would nullify the supermarket’s preferred strategy for dealing with supercenters and warehouse clubs. 8/16/2006

Tesco’s Success Course Far From Easy inaugurated our coverage of an excellent research report produced by the analysts at Credit Suisse. What did they entitle their report: It May Be Fresh, But It Won’t Be Easy. 2/23/2007

Tesco In America: Foodservice vs. Prepared Foods pointed out both the importance of its prepared foods offering to Tesco’s success and differences in the market between the U.S. and the U.K., which might mean that restaurants will offer stronger competition to Tesco in the U.S. than they do in the U.K. 2/27/2007

Tesco vs. Costco explored the implications of Tesco’s new American concept on Costco and pointed out how push-back from Costco and others might impact Tesco’s plans. 2/28/2007

Tesco’s Union Obstacle pointed out that union opposition could complicate Tesco’s U.S. expansion plans and that this was an issue Wal-Mart and Tesco had in common. 3/9/2007

Tesco vs. Target dealt with the possibility that Tesco’s new entry might cause Target to consider new formats and, possibly, slow down expansion on its supercenter format. 3/1/2007

Tesco In America: Real Estate closed out our review of aspects of the Credit Suisse report with a look at its assessment of the types of real estate that Tesco is pursuing in the U.S. We explored the possibility that such real estate was a double-edged sword, available and thus suitable for a rapid Tesco roll-out but also available to competitors if the concept’s success merits duplication. 3/2/2007

A Closer Look at Tesco’s Finances questioned whether Tesco’s profitability is due to superb operations or a sub-par return on real estate assets. 4/19/2007

Tesco’s US/Japan Small-Store Strategy Contrasts With Wal-Mart’s Big-Store Plan analyzed whether Tesco’s decision to open smaller stores was driven by its experience in the United Kingdom. 4/24/07

Ten Reason’s Why U.S. Chains Should Be Concerned About Tesco And Target reviewed a major retail report by the analysts at JP Morgan, entitled Supermarket Industry Review and Outlook: Is There Room for Two More Giants? We identified ten key points that are often overlooked in industry discussions. 5/3/07.

Is Tesco Sending A Message To U.S. Competitors? analyzed an interview given by Andrew Higginson, Tesco’s Finance and Strategy  Director regarding Tesco’s new American venture. 5/16/2007.

A Look At Tesco’s Stores provided exterior elevations as to the appearance of new Tesco stores. It also included maps and addresses of the twenty new Phoenix area stores plus an announcement of Tesco’s new “green” truck fleet. 5/24/2007.

Small Store Concepts Not Solely A Tesco Idea Check Out Wellcome’s Express Fresh Model looked at how retailers worldwide are claiming to see a niche in the area of small store concepts, including Wellcome supermarkets. With article excerpt from the Taipei Times detailing Wellcome Taiwan’s testing of the new store format. 5/25/2007

Clash Of Corporate Cultures Seen In Contrast Between Wal-Mart/ASDA Essentials And Tesco/Fresh & Easy examined problems with the Wal-Mart/ASDA Essentials concept including pricing, merchandising and store branding, and if Tesco may avoid these issues. Cultural differences in committing to a launch are revealed. 5/29/2007

Snapshots Of Tesco’s Vegas And California Stores illustrated the initial 15 Fresh & Easy Neighborhood Market locations in Las Vegas with street intersections and prototypical construction diagrams. 5/30/2007

Could Tesco Pounce On Wild Oats If  FTC Blocks Whole Foods’ Purchase? asked if the Wild Oats operation is too small and scattered for Tesco to bother with, or are locations in 24 states and one Canadian province, and an attractive operating model worth pursuing. 6/14/2007

Working With Wal-Mart May Not Be As Bad As You Think — Tesco Could Be Tougher!  examined how U.S. vendors may be excited about Tesco’s arrival in America, enabling them to diversify their business away from Wal-Mart, but the grass may not be greener once a Tescopoly takes hold. 6/15/2007

Pundit’s Mailbag — Tesco’s Behavior discussed a thoughtful letter from Matt Roy, Produce Director with Lincoln Poultry, in which he offers industry insight in response to our overall coverage of Tesco. Includes simple ways in which Tesco can ingratiate itself with U.S. vendors. 6/19/2007

Tesco Launches Price War In The U.K.  details Tesco’s launch of a 270 million pound price blitz. As its future in North America is about to be decided, what would motivate Tesco to launch such a battle in the U.K., its home base from which its profits flow to fund the American effort? 6/21/2007

Kroger And Tesco Approach Store Acquisitions Differently  contrasts differences in the acquisition strategies of Tesco versus Kroger by illustrating the recent sale by A&P of all of its 66 Farmer Jack stores in Michigan, with Kroger buying 20 of the best locations, against Tesco’s announcement of plans to open in marginal neighborhoods. 6/22/2007

Publix Tests Curbside Service…Hello, Tesco?  looks at Tesco’s  proposition to open, very quickly, hundreds of stores all built in a format that has no track record of consumer acceptance. Is this is a”brilliant or bankrupt” strategy? U.S. Supermarket chain Publix is testing what may be amore American definition of convenient.  7/12/2007

ASDA/Wal-Mart And Tesco Price Wars Portend Future Of Having To Take Sides  foretells of trouble ahead for U.S. suppliers after an ultimatum from ASDA’s business unit director: “We will only back those who back us.” 7/24/2007

Asda and Tesco Buyers Accused Of Arm-Twisting presented allegations of supplier abuse by Tesco and Asda and resulting investigations into forced discounts and threats of merchandise removal by the Competition Commission prompted by supplier complaints. 8/22/2007

UK Retail Environment Helps Suppliers Break Commodity Mold Incorporated letter excerpts from Tim O’Connor, President & CEO of the United States Potato Board, who offers his expertise on buyer-led food safety initiatives and supplier/retailer relationships, with particular attention to our recent piece: Asda and Tesco Buyers Accused of Arm Twisting 8/23/2007

Tesco’s Price-Hike Strategy revisited Tesco’s pricing strategy, only this time, instead of slashing prices to beat rivals, Tesco is raising them, representing an about face in the vicious price war, aimed at convincing consumers that higher prices correlate to higher quality. The real reasons behind the price hikes may not be so altruistic. 9/6/2007

Tesco Expands Plans For More Openings In California reported on Tesco’s announcement of plans to open 48, 10,000 square foot, Fresh & Easy Neighborhood Markets throughout California’s “Inland Empire.” With cities and intersections of the planned location in Riverside and San Bernardino. 9/26/2007

Is Publix’s Ownership In Crispers A Future Strategy Against Tesco? ;suggested that even though Publix has a strategy for fighting Whole Foods with its GreenWise concept,  it may also have a strategy for dealing with the prepared food offer should Tesco’s Fresh & Easy Neighborhood Market come east.10/9/2007

Tesco Marks November Eighth As Launch Date For Six Stores profiles Tesco’s announcement of Fresh & Easy Neighborhood Market first store openings in Southern California. With commentary on the “social responsibility” of these new stores touting healthy, private label products, high worker wages and benefits and “green” methodology. 10/10/2007

Tesco’s Biggest Challenge: Prepared Foods presented why Tesco’s success with its Fresh & Easy Neighborhood Market concept may well depend on the concept’s ability to get Americans to dramatically increase the frequency of food shopping. 10/10/2007

Report Card On ‘Green-ness’ Of UK Stores reported on the findings of self-proclaimed consumer advocacy group, the National Consumer Council on the “green-ness” of UK retailers, with Tesco “showing potential.” 10/18/2007

Tesco Intelligence From Pessimistic Vendors And Anxious Competitors reports on conversations the Pundit had at PMA that indicated that optimism on the success of Tesco seems to be waning, citing issues with unrealistic product sizes, restrictive contracts, margin evaporation and arrogance. 10/19/2007

Tesco, Disney and Dunnhumby pointed out that a deal between Disney and Tesco, based on tested recommendations by Dunnhumby, a consumer data consultancy majority owned by Tesco, says that a lot of consumers like the mouse. 10/24/2007

Tesco Under Attack From Waitrose in U.K. As U.S. Rollout Imminent Real Estate Key In Both Markets explains how allegations of “land banking” by Tesco are drawing the ire of competitors in the U.K. who are calling for government intervention. A closer look reveals Tesco’s use of real estate as part of a retailing strategy obscures its actual profitability. 10/25/2007

Tesco May Face Opposition Not Only From Unions But Also Animal Rights Activists reveals that direct appeals have been made to the Tesco Board of Directors from animal rights groups in response to Tesco’s treatment of animals at its Chinese stores. While normal in Asia, certain practices would make a western stomach turn. These may just be the pitfalls of operating a global company. 10/26/2007

Will Meijer Be In Tesco’s Sights If It Succeeds With Fresh & Easy Format? discussed the after effects of a successful emergence for Tesco in America, including a prediction that Tesco will make an offer to acquire Meijer. 11/2/2007

With Its Stance On Trans Fats, Tesco May Be Hip But Not Healthy  proposed that while eliminating trans fats in private label products is good, what replaces them may be worse. With an excerpt from the “Health Journal” column of The Wall Street Journal on the potential impact of those alternatives on the consumer waistline. 11/7/2007

Tesco Teases With Video Of New Store  showcased a short video clip released by Tesco to generate consumer buzz before the launch of its Fresh & Easy Neighborhood Market concept. With critique on the clip’s shortcomings. 11/7/2007

Confirmation Of Tesco In SFO  reports that leases have been signed, and rumors of Tesco’s arrival in the Bay area have come true, a direct assault on Safeway’s homeland. 11/7/2007

Tesco Finally Opens Doors… British Press And Protesters Unimpressed  described how Tesco’s opening in America drew harsh words from British journalists, and the Pundit agrees. Tesco has worked hard on reputational marketing, and those who live by the sword can easily die by the sword. Also asks the real question: How big is this market? 11/9/2007

Pundit’s Mailbag — Tesco Gets Reviews From Industry Members retold several industry members offerings of support of Tesco’s Fresh & Easy concept. As a refrigerated, prepackaged niche somewhere above Wal-Mart and below Whole Foods, the shrinking middle class may offer a customer base, but the genie is out of the bottle, and the concept is not Tesco’s alone. 11/13/2007

Tesco Takes Heat For Not Supporting Underserved showed how the Los Angeles Times has blasted Tesco for not “walking the walk” when it comes to locating stores in underserved areas. Analysis reveals less than 10% of planned locations will appear in high-poverty neighborhoods, …long excuses from Tesco. 11/21/2007

Tesco, Polar Bears And Social Irresponsibility pondered why Tesco, a giant corporation with extensive resources, wouldn’t more carefully vet any pop-culture environmentalism claims before it starts posting them in every back room and putting them on postcards sent out by the CEO. 11/30/2007

Tesco’s Secret Expansion Plan? asked how after only 3 weeks since opening, Tesco is talking about a second distribution center to service Northern California, are secretive plans for a major takeover and supercenter concept on the horizon? 12/4/2007

Will Tesco Regret Operating Its Own Commissary? points out how Tesco should’ve learned from Wal-Mart on the trouble with commissaries. They recently suffered a legal setback when a California court ruled against them in a lawsuit brought by a front group for the unions that its main warehouse did not comply with environmental planning law. 12/4/2007

Decline Of Nobel Culture: From Theodore Roosevelt To Al Gore...To Tesco & Non-existent Drowning Polar Bears  examined how the politicization of the Nobel committee and the general decline in standards has led to some interesting award winners when compared historically. With reference to Tesco, Polar Bears And Social Responsibility. 12/11/2007

Trip To Tesco’s Fresh & Easy Store Reveals The Good, The Bad and The Ugly  Retells a visit to a Fresh & Easy Store by the Pundit where an examination reveals more cons than pros. 12/14/ Trip To Tesco’s Fresh & Easy Store Reveals The Good, The Bad and The Ugly  Retells a visit to a Fresh & Easy Store by the Pundit where an examination reveals more cons than pros. 12/14/

Tesco Observations From A Retail Pro shared comments from a correspondent visitor to the newest Fresh & Easy stores in California and expanded our earlier critique Trip To Tesco’s Fresh & Easy Store Reveals The Good, The Bad and The Ugly 12/18/2007

Will Tesco Keep Its Promises?  Disclosed two reactions from readers to our expanding coverage of Tesco’s promise to locate stores in the “food deserts” of Los Angeles. The Pundit feels this is just the first of many promises Tesco won’t deliver on. 12/19/2007

Was Tesco’s Real Estate Decision A Result OF Hubris Or Humility?  Caught in a series of sub-standard locations, Tesco may find that hubris, as it must, brings its price as its American supermarket competitors decide to fight back. 12/20/2007