Tesco Express to launch in United States

Every little helps when it comes to growing Tesco it seems, as it announces plans to enter the tough US market.

Every little helps when it comes to growing Tesco it seems, as it announces plans to enter the tough US market. By rolling out a concept based on its Tesco Express format, the grocer will be opening the door into the world’s biggest consumer economy and the third largest population. Setting up shop in global giant Wal Mart’s backyard won’t be easy, however, and the news was received with some trepidation in the City where the share price fell on the announcement.

The US will be Tesco’s 13th country in which it does business and in entering the market it is attempting to succeed where other UK retailers have failed – both Marks & Spencer and Sainsbury’s have entered and pulled out Stateside. Tesco, however, is confident that experience in several other global markets, including Turkey and China, will give it the edge.

In the past Tesco has concentrated on markets in the developing world, though, and has teamed up with local players in order to gain a foothold. The strategy in the US is to go in as a stand-alone retailer, starting in California in the convenience sector where it says it has spotted a gap in the market.

In the UK Tesco has some 30% of the grocery market and takes one in every £8 spent on the high street, according to estimates. Long term, Tesco boss, Sir Terry Leahy, has said he hopes to make more money internationally than at home.

db  March 2006