Tesco takes a breather in its US growth strategy
Monday, March 31, 2008
by Jim Riley
There were rumours a few weeks ago, and now a management blog confirms that Tesco is pulling back on the growth reins as it takes on the grocery market in the US.
We blogged about Tesco’s entry into the US grocery market a little while ago.
An entry on the Fresh & Easy blog confirms that Tesco is taking a pause for breath whilst it consolidates the stores it has opened in the US so far.
Fresh & Easy marketing director Simon Uwins revealed on the company’s website, where he writes an occasional blog, that there would be “a three month break from openings ... simply to allow the business we’ve created to settle down”.
According to The Guardian, analysts at Goldman Sachs and US brokerage Piper Jaffray downgraded their forecasts for Tesco over concerns about Fresh & Easy.
Mike Dennis of Piper Jaffray said “very weak footfall” had become an issue for the new chain, adding supplier feedback suggested the sales could be as little as $30m, against the anticipated $100m.
It is interesting how a business manager’s blog can let the story slip out into the media - maybe it was planned that way.
All credit to Tesco though. There is no point pressing ahead with a rapid growth plan unless you’re happy that the retail format is working, so it makes sense to take a little time to refine the format before rolling out the new stores again. A real question of quality over quantity.
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Comments
Glad to have found your blog. Good work. You might want to read what we have to say about the Tesco Fresh & Easy Neighborhood Market ‘Pause’ on our blog Fresh & Easy Buzz linked below:
We reported the story Saturday, after reading the mention on the Fresh & Easy corporate blog. As far as we can tell, we were the first to report it in the U.S., and perhaps anywhere.
There’s added info in our piece as well. Also, lots of other news, info and analysis on Fresh & Easy, TEsco, and realted topics in the blog.
Will be visiting your blog often.
Regards
freshneasybuzz.blogspot.com
Posted by
Fresh & Easy Buzz on 03/31 at 07:57 PM
interested, but not surprised by the ‘pause’in f&e;openings; my own personal experience of fresh and easy is that it has not won over my american neighbours - i have a holiday home in phoenix; i like the manageable size of the stores and love it for back bacon, but british expats desperate for an alternative to streaky bacon will not constitute a retail success!;
Posted by on 04/01 at 05:54 AM
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