Tesco in the United States
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Case Details:
Case Code : BSTR291
Case Length : 13 Pages
Period : 2005-2008
Pub Date : 2008
Teaching Note :Not Available
Organization : Tesco
Industry : Retail
Countries : USA
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Introduction Contd...
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The Manhattan Beach Fresh & Easy store was the first store
that the company opened after a self-imposed three-month halt announced in
April, 2008.
Tesco had entered the US in November 2007 with small format grocery stores
called Fresh & Easy, designed exclusively for the American market. Although the
company opened its first stores only in November 2007, there had been reports in
US-based newspapers since early 2005 on Tesco's pre-launch activities such as
conducting market research, negotiating leases, purchasing land for a
distribution center in Moreno Valley, California, and establishing its US
headquarters in El Segundo, California.
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By September 2005, reports indicated that Tesco had built a
team of 60 executives in New York and on the West Coast. This team had
apparently laid the ground for the store openings in late 2007.
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Although Tesco had thoroughly researched the US
market and the American shopper and developed what it felt was a
foolproof entry strategy, initial reports suggested that its US
operations had met neither the shoppers' expectations nor its own. The
company was criticized for its small assortment, its overemphasis on
private labels, and its aggressive expansion. In April 2008, Tesco
announced that it would halt its expansion in the US for the next three
months. The company wanted to pause and make changes to its strategy
based on customer feedback and its experience in the market. According
to some sources, the company was forced to do this as sales had fallen
far short of expectations... |
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