U.S. retailers must now make room for U.K. mega-chain Tesco as the wildly successful convenience store is reportedly clearing an area the size of 80 soccer fields just east of Los Angeles for the opening of its U.S. headquarters later this year.
Tesco claims they are, “expecting to tap consumer demand for high-quality fare.” The company will spend as much as $490 million in the U.S. this year and plans to open stores in Southern California, Phoenix and Las Vegas during 2007, according to a recently released statement.
When you consider the history of previous U.K. retailers testing American waters the Tesco venture would appear to be a risky one as other British merchants such as J Sainsbury Plc, and Marks & Spencer Group Plc ultimately failed here. Retail analysts claim the Tesco launch is simply of a different nature.
“These guys have doe their homework,” began Martha Refik, an analyst who operates out of New York. “This is a well researched move and they understand the U.S. market. We are talking about the Walmart of the U.K. They don’t make wrong moves.”
Refik is apparently right as to prepare for its U.S. move, Tesco sent directors to interview 60 Southern California families to get a detailed understanding of eating and shopping habits in the area. The company even built a full-scale outlet in a warehouse so focus groups could provide feedback on Tesco’s range of goods.
Tesco currently has 1,897 U.K. outlets, including 1,171 One Stop and Tesco Express convenience stores. The company claims that they collect 1 of every 8 pounds spent in Britain.
On the photo side of the equation, the company teamed up several years ago with image software makers Pixology and is currently running their software suite in photo kiosks in many of their locations.
A visit to Tesco’s website reveals offers for 200MB of free online storage and a wide array of photo gifting products. One of the more unique items was under ware with personal images printed on the front or back. Oh those Brits.
The original plan was to open approximately 250 stores in the U.S. over an extended period but many people following this story think the expansion will be far greater and much swifter.
