Tesco expands to USA
Discussion
So tangential to the UK/USA price thread
Tesco to open a chain of Express style stores in the USA.
Good move?
Personally I think they will get their asses kicked, but then Mrs FiF works for JS, so I would say that.
Tesco to open a chain of Express style stores in the USA.
Good move?
Personally I think they will get their asses kicked, but then Mrs FiF works for JS, so I would say that.
Tesco won't make it in the USA.
They have been very successful here partly by selling good quality own label products ( through massive distribution reach) which by their nature have low marketing costs and high margins by the virtue of Tesco being tough with non-branded producers desperate for business.
American consumers are far more into branded grocery products ..... exactly *what* purchasing or marketing advantage will Tesco have over the American retailers ?
They have been very successful here partly by selling good quality own label products ( through massive distribution reach) which by their nature have low marketing costs and high margins by the virtue of Tesco being tough with non-branded producers desperate for business.
American consumers are far more into branded grocery products ..... exactly *what* purchasing or marketing advantage will Tesco have over the American retailers ?
i would love to see them do well, but i think they will get kicked straight back over. their main advantage here is their buying power and compared to walmart they are little more than a corner shop. they should stick to conquering europe and parts of asia first
>> Edited by paulhol on Thursday 9th February 18:24
>> Edited by paulhol on Thursday 9th February 18:24
Used to work for Tesco up until a few weeks ago and I think they'll do well. Look at how well run the company is, from way behind sainsbury to market leader in this country buy a mile. The Express stores will probably not make much money over there but will get the brand known by being placed in convenient locations and essentially being bankrolled by the hugely profitable main operation. The store I worked in was in the centre of Glasgow and due to massive rents it only started to make money in the last 3 years and it had been there for 11 or twelve. It was turning over £300,000ish a week when i left and was essentially used as a giant advert for the out of town Extra stores. Wait a few years and once they've got a foothold theyll open some of the bigger stores and assuming they can educate the Americans that cheapest isn't always best like they've done in the UK then they'll kick wal-marts ass. Look at ASDA in the UK, wal-mart have practically disowned it and most of the US directors shipped over for the launch have left.
deevlash said:
Used to work for Tesco up until a few weeks ago and I think they'll do well. Look at how well run the company is, from way behind sainsbury to market leader in this country buy a mile. The Express stores will probably not make much money over there but will get the brand known by being placed in convenient locations and essentially being bankrolled by the hugely profitable main operation. The store I worked in was in the centre of Glasgow and due to massive rents it only started to make money in the last 3 years and it had been there for 11 or twelve. It was turning over £300,000ish a week when i left and was essentially used as a giant advert for the out of town Extra stores. Wait a few years and once they've got a foothold theyll open some of the bigger stores and assuming they can educate the Americans that cheapest isn't always best like they've done in the UK then they'll kick wal-marts ass. Look at ASDA in the UK, wal-mart have practically disowned it and most of the US directors shipped over for the launch have left.
While Wal-Mart has their own brand, they also sell every other brand. They simply sell name brands cheaper too by sheer buying power(world's largest retailer). What they do is make name brands compete against each other to underbid their competition simply to be allowed to be sold in Wal-Mart stores...Thus, to compete, Tesco will have to have massive amounts of cash to be able to make prices lower, be they name brand or store brand. I have a feeling, however, that Tescos will fill a nitch. There are those who will shop somewhere for a different experience or atmosphere regardless of the prices.
jimbeaux said:
Used to work for Tesco up until a few weeks ago and I think they'll do well. Look at how well run the company is, from way behind sainsbury to market leader in this country buy a mile. The Express stores will probably not make much money over there but will get the brand known by being placed in convenient locations and essentially being bankrolled by the hugely profitable main operation. The store I worked in was in the centre of Glasgow and due to massive rents it only started to make money in the last 3 years and it had been there for 11 or twelve. It was turning over £300,000ish a week when i left and was essentially used as a giant advert for the out of town Extra stores. Wait a few years and once they've got a foothold theyll open some of the bigger stores and assuming they can educate the Americans that cheapest isn't always best like they've done in the UK then they'll kick wal-marts ass. Look at ASDA in the UK, wal-mart have practically disowned it and most of the US directors shipped over for the launch have left.
While Wal-Mart has their own brand, they also sell every other brand. They simply sell name brands cheaper too by sheer buying power(world's largest retailer). What they do is make name brands compete against each other to underbid their competition simply to be allowed to be sold in Wal-Mart stores...Thus, to compete, Tesco will have to have massive amounts of cash to be able to make prices lower, be they name brand or store brand. I have a feeling, however, that Tescos will fill a nitch. There are those who will shop somewhere for a different experience or atmosphere regardless of the prices.
That may be true but regardless of what they say in their adverts Tesco clearly arent the cheapest in the UK when it comes to known brands but iv always trusted their own brand stuff over someone elses. They managed to become hugely succesful by selling to both ends of the market through the dirt cheap Tesco Value stuff and the Tesco Finest stuff which often does well in the tests magazines that housewives buy. They'll never beat wal-mart for cheap prices, thats not what theyre about anymore and will be relying on the grocery market developing above pile em high philosophy. That might seem like wishful thinking but people who are snobby might go for the whole Eurpean thing, and they'll have more money t spend anyway. You can bet that if Tesco are going for it they'll be damned sure its to make money in the long run, they dont make £2billion a year and rising by being mugs.
the other half has compared tesco to walmart. shes a yank and is well versed in the art of shopping.
her analysis (and we've actually talked about this) is that the range of food that tesco and most UK supermarkets offer in UK far exceeds that of walmart and US supermarkets. she loves adores shopping in tesco when shes here because there is so much choice that she doesn't get in the US.
her analysis (and we've actually talked about this) is that the range of food that tesco and most UK supermarkets offer in UK far exceeds that of walmart and US supermarkets. she loves adores shopping in tesco when shes here because there is so much choice that she doesn't get in the US.
My thoughts on this are the following.
If Tescos succeed they will be the first UK retailer to do so in the USA.
Comparisons about better range of a particular product line on offer vs WalMarts actually
I agree with. Personally I don't find Walmarts so bad, but it is a more restricted version of UK supermarkets, ie only the best sellers in each line. Local stores for choice imo.
Comparing Tescos with Sainsbury depends quite a bit on local store management. Mrs FiF's branch of JS completely kicks the local Tesco's into touch in all respects, presentation, stock availability, staff and services. I mean you can go in Tescos at 8 am on Saturday and they have no spuds, not just no baking, but no spuds, full stop! The shelves look as if its 5pm on Christmas Eve, stripped bare.
I'm not just saying that because my Mrs works there because we thought that before she joined. It was partly the reason for joining. Now we understand why Justin King has chosen her store as his adopted store, gaffers privilege I guess, maybe her store is an exception as it's a flagship.
Surely a lot of Tesco current success is sheer market penetration. Against the one local JS we have one Superstore, one Metro, three Express, and planning application about to go in for another superstore to replace the Metro. The local single outlet convenience store and operator of two three stores has largely been driven out of business. I think there is MUCH more competition at all levels in USA from Mom and Pop operations to other grocery /supermarket chains and chains in other goods who happen to sell groceries, eg Walgreens as a bad example.
On the other hand they may just make a go of it, learn from the USA retail experience and bring that knowledge back to Europe. If, and its a big IF, they can get UK staff to regard customer service the American way then look out the others.
2p
FiF
If Tescos succeed they will be the first UK retailer to do so in the USA.
Comparisons about better range of a particular product line on offer vs WalMarts actually
I agree with. Personally I don't find Walmarts so bad, but it is a more restricted version of UK supermarkets, ie only the best sellers in each line. Local stores for choice imo.
Comparing Tescos with Sainsbury depends quite a bit on local store management. Mrs FiF's branch of JS completely kicks the local Tesco's into touch in all respects, presentation, stock availability, staff and services. I mean you can go in Tescos at 8 am on Saturday and they have no spuds, not just no baking, but no spuds, full stop! The shelves look as if its 5pm on Christmas Eve, stripped bare.
I'm not just saying that because my Mrs works there because we thought that before she joined. It was partly the reason for joining. Now we understand why Justin King has chosen her store as his adopted store, gaffers privilege I guess, maybe her store is an exception as it's a flagship.
Surely a lot of Tesco current success is sheer market penetration. Against the one local JS we have one Superstore, one Metro, three Express, and planning application about to go in for another superstore to replace the Metro. The local single outlet convenience store and operator of two three stores has largely been driven out of business. I think there is MUCH more competition at all levels in USA from Mom and Pop operations to other grocery /supermarket chains and chains in other goods who happen to sell groceries, eg Walgreens as a bad example.
On the other hand they may just make a go of it, learn from the USA retail experience and bring that knowledge back to Europe. If, and its a big IF, they can get UK staff to regard customer service the American way then look out the others.
2p
FiF
Id agree with that statement, especially the customer service part. In the UK it seems most people in supermarkets (not including me) feel that theyre proving something to themselves by treating the customers like dirt and take very little pride in their work. Small minded petty thinking and probably why theres very little manufacturing left too
Many years ago,Tesco founder Jack(Pile it high, sell it cheap)Cohen visited America and brought many ideas back with him, Checkouts, Trading stamps etc,
Good luck to them, but I think they will find it hard going.......
David Whelan at JJB sports opened several outlets in Spain several years ago, but had to pull out as the venture lost millions....
Good luck to them, but I think they will find it hard going.......
David Whelan at JJB sports opened several outlets in Spain several years ago, but had to pull out as the venture lost millions....
Flat in Fifth said:
Comparing Tescos with Sainsbury depends quite a bit on local store management. Mrs FiF's branch of JS completely kicks the local Tesco's into touch in all respects, presentation, stock availability, staff and services. I mean you can go in Tescos at 8 am on Saturday and they have no spuds, not just no baking, but no spuds, full stop! The shelves look as if its 5pm on Christmas Eve, stripped bare.
FiF
Of course Sainsburys have stuff left, it's cos they're too expensive
I've stopped shopping at Sainburys just because it is so expensive, I now do Morrisons, find it the best combination of cheap/choice for me. Not the cheapest but plenty of choice and plenty of mulitbuys.
My last experience in a UK grocery store was about 2 years ago. However, some observations (and things Tesco should change if they want to make it)
1. You don't have the customer bag their own groceries. That's just poor customer service.
2. You don't have the customers carry their own groceries to the car. You employ many a pimply face youth to do that for them. The younger the better, that way they don't expect a tip.
3. You must have a special orders desk where one can order in a case of McEwans or Carton of Dunhill (that is - if you don't carry it).
4. You don't provide chairs for your lazy arsed cashiers to sit on. A grocery cashier is required to STAND at their post.
5. You DO teach your staff to smile and be friendly.
---
Just some observations. Anyone working at Tesco, please feel free forward this on...
ErnestM
>> Edited by ErnestM on Friday 10th February 01:01
1. You don't have the customer bag their own groceries. That's just poor customer service.
2. You don't have the customers carry their own groceries to the car. You employ many a pimply face youth to do that for them. The younger the better, that way they don't expect a tip.
3. You must have a special orders desk where one can order in a case of McEwans or Carton of Dunhill (that is - if you don't carry it).
4. You don't provide chairs for your lazy arsed cashiers to sit on. A grocery cashier is required to STAND at their post.
5. You DO teach your staff to smile and be friendly.
---
Just some observations. Anyone working at Tesco, please feel free forward this on...
ErnestM
>> Edited by ErnestM on Friday 10th February 01:01
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