Tesco in the United States
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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.
"What's the problem with Fresh & Easy? In our view, it is a sterile, small Costco, too quiet, not quirky, has a negative feel, too different or ahead of its time. Maybe all of the above, but Tesco seems to have over-engineered the concept."1
- Mike Dennis, analyst, Piper Jaffray, in April 2008.
"This is a tremendously exciting move for Tesco which will add a new leg to our international expansion. The United States is the largest economy in the world with strong forecast growth and a sophisticated retail market. It is a market we have researched extensively for many years and over the last year we have committed serious resources to developing a format that we believe will be really popular with American consumers. We've put a strong team together, led by Tim Mason and drawing on the wealth of skills and experience within the group."2
- Terry Leahy, CEO, Tesco Group, in 2006.
"While the market, understandably enough, is giving Tesco the benefit of the doubt at this early stage, we see considerable risks associated with the US market and wonder whether the £250m a year would be better spent in existing territories or ones where dominance might be easier to achieve."3
- Sanjay Vidyarthi, Retail Analyst, Teather & Greenwood4, in 2006.
1] James Hall, "Fresh Idea from Tesco Turns Out to be Anything but Easy,"www.telegraph.co.uk, April 19, 2008.
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