Tesco Targets 300 Sites For Grocery Stores In Southern California, Las Vegas, Phoenix

Tesco aims to open some 300 small grocery stores in Southern California, Las Vegas and Phoenix and is prepared to spend as much as $2 billion over five years on the effort.

Tesco USA Chief Executive Tim Mason said his management team was negotiating for 300 sites, although “not all will get opened,” The Los Angeles Times reported late last year.

The first stores will open in the second half of next year, and the pace of development will pick up as Tesco gets its distribution network operational, Mason said. He said many more stores could follow.

“If this is successful, this is a very big country,” Mason said at the public opening of the company’s U.S. headquarters in El Segundo.

Tesco has kept secret most of the details of its launch — which focuses on Southern California and the Southwest — out of fear that rival grocers will develop a strategy to foil its plans. On Dec. 4 Tesco again withheld details about any of the locations it is moving forward with. But in September, the company leased a shuttered Albertsons market in Glassell Park.

The company plans to push into underserved urban areas that need to be “re-energized,” Mason said.

“We think there are a lot of good opportunities there,” he said, adding that Tesco had experience in running successful stores in distressed urban areas in England.

Tesco’s entrance into Southern California will provide a potent new competitor to traditional grocers such as Kroger Co.’s Ralphs, Safeway Inc.’s Vons and Supervalu Inc.’s Albertsons. The British company’s arrival ratchets up the stakes at a time when the supermarkets already face pressure from the expansion by discount chains Wal-Mart Stores Inc. and Target Corp. into food offerings.

“It is already a competitive market, and I would be lying if I said the rest of our membership was looking forward to the arrival of Tesco,” said Peter Larkin, president of the California Grocers Assn. in Sacramento. “But the grocery chains are accustomed to new challenges and will be ready to compete when Tesco opens its stores.”

Mason said Tesco was looking for sites of about 15,000 square feet, with about two-thirds devoted to sales space. That would make the typical U.S. Tesco store about the size of an average location of Monrovia-based Trader Joe’s.

Tesco expects to hire about 2,500 employees in its first year as it opens “a format that we call the ‘neighborhood market,’ ” Mason said.

Mason said Tesco was looking at the range of hourly wages paid in the areas it planned to enter and would offer a competitive pay package that could include bonuses, a 401(k) savings plan and health benefits.

“We know that we have to be a good employer if we want to attract people in this market,” he said.

Although he was approached by members of the United Food and Commercial Workers union at the Dec. 4 opening, Mason said the company had not decided whether it would have a union workforce.

Tesco, with about $80 billion in annual sales worldwide, already operates in 13 countries and employs more than 300,000 people.

(Source: The Los Angeles Times)

New player has strong credentials

Merrill Lynch analyst Patricia Baker said Tesco’s arrival could only be viewed as a “negative” for the conventional supermarket channel.

“The coming of Tesco represents not only a new player but one that is a quite accomplished retail entity with the ability to attack this market in a much more meaningful fashion over the long term, should it choose to do so,” she wrote in a recent research note.

Based in Cheshunt, England, the Tesco Group currently runs about 2,500 stores in the United Kingdom and 12 other countries in Europe and Asia.

Tesco operates four different retail formats. Tesco Express, a smaller store format of up to 3,000 sq. feet, sells fresh produce, wine and in-house baked goods; mid-size Tesco Metro stores range between 7,000 to 15,000 sq. feet; larger Tesco supercenters of between 20,000 to 50,000 sq. feet also carry non-food items like DVDs and books and Tesco “Extra” stores of over 60,000 sq. feet have a more varied product mix including clothing, housewares, electronics, cosmetics and garden furniture.

The company last year reported profits of $3.5 billion on total sales of $65 billion. That’s still significantly smaller than the $312 billion in revenue Wal-Mart garnered with twice as many stores.

If you want to compare Tesco and Wal-Mart, Langdoc said you should look at the performance of both retailers in the U.K., where Wal-Mart already directly competes with Tesco through its ASDA grocery stores.

According to Langdoc, ASDA is struggling in the U.K. against fierce competition from leader Tesco.

“Wal-Mart even complained about Tesco’s 30 percent market share of the supermarket sector in the U.K. and asked the government to investigate,” Langdoc said. “This shows that Wal-Mart is keeping a close eye on Tesco.”

Perhaps Tesco is doing the same. Industry watchers point out that the company may have decided to enter through the West Coast first because that region of the country is not yet dominated by Wal-Mart.

Wal-Mart could not be reached for comment.

(source: CNN.com)

ABOUT TESCO

(source: Tesco Corporate)

Tesco is the UK’s largest retailer and one of the world’s leading international retailers. We have reached this position through consistent focus on our four part strategy for growth:

We have a strong, growing core UK business offering customers excellent value, choice and convenience

We aim to be as strong in non-food as we are in food

We follow the customer into new areas–like retailing services such as financial products (Tesco Personal Finance), internet shopping (Tesco.com) and telecoms (Tesco telecom offers mobile, fixed line and broadband services).

We are a leading international retailer with a long term strategy for growth.

The Tesco Group had turnover of £33,974 million ($59,454 million) with pre-tax profits of £2,029 million ($3,551 million) in the year to February 2005. We have 2,467 stores, employing over 370,000 people in the 13 countries in which we operate. In Europe, outside the UK, we operate in Ireland, Hungary, Poland, Czech Republic, Slovakia and Turkey where we have 305 stores and over 61,000 employees. In Asia we have 343 stores and over 40,000 employees across our businesses in Thailand, S. Korea, Malaysia, Taiwan, Japan and China. We are the market leader in six of the countries we trade in. Tesco is a multi-format business, operating hypermarkets, superstores, supermarkets and convenience stores.

Leave a Reply

More From Marketing...
PP&L CAST 2015 intros

April 22, 2015

6 Breeding Companies Serve Up New Varieties At Pacific Plug & Liner

Pacific Plug & Liner’s theme this year, Labyrinth, a conservatory of the world’s most captivating plants, was perfectly topped off (pun intended) with fascinators for the women and newsboy caps for the men. The PP&L team dressed their part to act out the gothic “conservatory of the world’s most captivating plants.” Truly, the displays looked like they practically popped out of a catalog, and the costumes were a nice touch. Retailers take heed, the fully merchandised displays at Pacific Plug & Liner are worthy of emulating. We’ll let the pictures tell the story of all the fabulous variety introductions presented at  Pacific Plug & Liner’s 2015 California Spring Trials, where Cultivaris, Cohen Nurseries, Histil Nurseries, Jaldety Nurseries, Southern Living/Sunset Collection and Pacific Plug & Liner all highlighted their 2016 introductions.  

Read More
Speedling 2015 CAST intros

April 22, 2015

Speedling Inc. Presents New Varieties From ABZ Seeds, Hem Genetics, Thompson & Morgan, Vista Farms & PSI

You name it, we saw it at Speedling's California Spring Trials location in San Juan Bautista, where five companies showed off their new introductions for 2016.

Read More
PittMoss on Shark Tank

April 22, 2015

PittMoss Wins On Shark Tank

Mont Handley, president and CEO of PittMoss, appeared on ABC’s Shark Tank on April 17 to try to get the “sharks” to invest in his peat moss alternative. Three investors from the TV show contributed $600,000 to PittMoss for a 35 percent stake in the company. Check out this clip from ABC’s website in which Mark Cuban, Kevin O’Leary and Robert Herjavec discuss getting on board with the product. PittMoss is an alternative to sphagnum peat moss, made up of a mix of proprietary additives and recycled paper rescued from landfill space. Handley founded the Pittsburgh-based company in 1994. What started as a small experiment grew into a full-fledged business with the help of funding provided by an EPA SBIR grant and Pittsburgh’s Idea Foundry. Today, PittMoss is available to commercial greenhouses and nurseries from Michigan to Maine to North Carolina, with plans to grow. To learn more, visit PittMoss’ website, or check it […]

Read More
Latest Stories

April 15, 2015

Redesigned SunPatiens Website Offers New Tools For Saka…

Sakata Seed America's new and improved SunPatiens website launched March 1, 2015 and provides growing information, marketing support, product location and many more tools to encourage consumer success with SunPatiens.

Read More
Keenland

April 13, 2015

Proven Winners Partners With Award-Winning Designer Jon…

Proven Winners will partner with award-winning garden designer, author and fine living expert Jon Carloftis on a new series of four LIFE + STYLE events in 2015. In true Carloftis style, food and spirits will be paired with inspiring architecture and innovative garden designs featuring Proven Winners plants.

Read More

April 13, 2015

New Consumer Website Makes Buying Roses Easier

A new website has been created as a resource tool for gardeners who are looking for a rose that fits their needs. This website is 100% consumer focused and will inspire confidence and promote rose gardening to the next generation of gardeners. Visitors will also find links to connect on social networks, such as Facebook and Pinterest. The website promotes roses, not specific brands, and that is what makes it unique.

Read More
Rose rosette on Knockout rose, April 2012. Photo credit: Alan Windham, University of Tennessee

March 25, 2015

$58 Million In APHIS Farm Bill Funding Will Support Hor…

Nearly $58 million as been allocated by the USDA's Animal and Plant Health Inspection Service (APHIS) to support the industry's Plant Pest and Disease Management and Disaster Prevention Program, under Farm Bill Section 10007. The program will support mitigation efforts for specialty crops, including providing research and other funding to address plant pest and disease priorities for the specialty crop industry, including floriculture and nursery crops.

Read More
National Floriculture Forum 2015 029

March 18, 2015

2015 National Floriculture Forum Focuses On Marketing I…

The 2015 National Floriculture Forum, held March 6 to 7 in Minneapolis, Minn., zeroed in on the topic of marketing in horticulture and included visits to Gertens Greenhouses and Garden Center, Bailey Nurseries, Bachman’s Floral, Home and Garden and Tangletown Gardens. The annual meeting allows greenhouse and floriculture faculty, graduate students and industry partners to meet and share updates on current research, issues and initiatives.

Read More

February 18, 2015

Range Of Nursery Inspections To Protect Patented Plants…

Plant patents are under protection, and breeders are fighting for their rights to keep growers from illegally propagating protected varieties. It's something you don't want to take a chance on, because the risk is far higher than the reward. More than 300 inspections were carried out last year from New York to British Columbia and from Ontario to Florida to protect plant patents, Plant Breeders’ Rights (PBR) and branded programs.

Read More

February 4, 2015

TPIE 2015: An Electrified Industry Vibe Boosts Cool New…

The general feeling at the Florida Nursery Growers and Landscape Association's 2015 Tropical Industry Exhibition (TPIE) was upbeat and positive. Attendees were inspired by exciting new products and varieties, as well as creative new displays and innovative ideas and left energized for the season ahead.

Read More
Costa Farms Website

January 21, 2015

Costa Farms’ Launches New Interactive Website

Costa Farms is making efforts to educate consumers while pushing horticultural digital marketing forward with the re-design of its website. The new website features a fresh design and improved navigation, as well as a plant finder that gives gardeners easy access to plant information.

Read More

January 5, 2015

Growers Are Successfully Marketing The Benefits Of Pla…

Growers who are already marketing plant benefits and gardening as a lifestyle say they think this could be the best angle for the floriculture industry to promote our products.

Read More

January 5, 2015

Plants Love You Campaign Raises Plant Benefits To Foref…

Plants make us feel good. It’s a no-brainer, backed by numerous studies, but there’s more to the story. And it’s one the Canadian Ornamental Horticulture Alliance (COHA) hopes its Plants Love You campaign will tell in such a way that it will inspire people to make plants a part of their life, and on a bigger scale. COHA is an alliance between the Canadian Nursery Landscape Association (CNLA), the Fédération Interdisciplinaire De L’Horticulture Ornementqale Du Québec (FIHOQ) and Flowers Canada Growers (FCG). Inspiration for The Plants Love You campaign came from COHA’s research, which revealed that 96 percent of consumers surveyed have a favorable attitude toward plants. When COHA delved deeper into the numbers, one thing stood out loud and clear. “It quickly became apparent that while consumers like plants because they are pretty and make them feel good, few understood the environmental and health benefits plants offer.” says Frank […]

Read More

December 9, 2014

New Website For PanAmerican Seed

PanAmerican Seed's new website is mobile-friendly and has a fresh look and enhanced navigation.

Read More
What’s a pumpulent? It’s a pumpkin planted with succulents, and it’s also one of the ways Altum’s is catching customers’ attention with new products and modern marketing.

December 1, 2014

9 Digital Marketing Resolutions For 2015

Whatever your experience with digital marketing, here’s some advice for keeping your business progressing into the new year.

Read More

November 25, 2014

Conley’s Launches New Website

Conley’s Manufacturing and Sales recently launched its newly designed website, which was redesigned to create a user-friendly digital environment for customers to explore Conley's products.

Read More

November 17, 2014

Canada’s Plants Love You Campaign Educates Consum…

In a cooperative effort to promote the benefits of plants to consumers, the Canadian Ornamental Horticulture Alliance (COHA) recently launched its Plants Love You campaign to make consumers more aware of the health, environmental and economic benefits of plants.

Read More
Supertunia® Vista Bubblegum™ Petunia from Proven Winners

November 11, 2014

Plantbid Offers New Tool For Growers, Plant Buyers

Plantbid is touted as a revolutionary new tool that allows plant buyers to purchase their whole plant list at one time, from growers who provide their complete availability online. According to the company, this new offering could change the way growers and landscapers do business.

Read More
Dahlia Dahlinova Temptation Lavender from Dummen Fides Oro

November 10, 2014

Bas Pellenaars Takes On New Role As Brand Manager For D…

Dümmen group announces the transition of Bas Pellenaars from area manager to brand manager.

Read More

October 28, 2014

Zombie Adventures Are Back: GGS Releases Premiere Of Ne…

What's good for plants, but bad for zombies? GGS structures. The company released a new promotional video to get growers in the spirit of Halloween. GGS Structures ran a series of zombie movies last year, and this year, something new was released October 24.

Read More
Suzanne McKee

October 27, 2014

Use Your Data To Make Smarter Marketing Decisions

Learn which marketing metrics are important to your business, measure successes and learn where changes are needed.

Read More