Tesco's foray into the U.S

The U.S is by far one of the most competitive markets for the supermarket industry. With the ongoing battle between Wal-Mart and Target, it would seem that the U.S presents little opportunity for yet another retailer. Indeed, many were surprised when Tesco, the British retailing giant, announced that it would be coming to the United States. At first glance, this would seem to be a rather foolish move. Previous British retail giants such as Sainsbury's and Marks & Spencer have failed miserably on this side of the Atlantic. What's more, they are now in rather pitiful situations in their own domestic markets, suffering from the domination of...you guessed right, Tesco.

However, Tesco believes that it possesses the formula to become a real player in the American market by establishing itself in the ultra-competitive West Coast. The twist? Tesco will avoid going head-to-head with supermarket giants Safeway and Kroger. Rather, it is bringing a new store format along, somewhere between a supermarket and a convenience store. The name, "Fresh & Easy", says it all. Clearly, Tesco is hoping to capitalize on current trends in the food industry, which include a growing emphasis on convenience as well as organic and all-natural products. There is reason to believe that Tesco can succeed. While Wal-Mart's forays into foreign markets have been met with mixed results (a strong presence in South America, but complete failures in Germany and South Korea), Tesco has succeed in South Korea and plans to use its experience to conquer the American market.

Moreover, Tesco is counting on its no-so-secret weapon, the Clubcard. While allowing customers to accumulate rewards every time they shop at Tesco, the Clubcard has provided a wealth of information for Tesco marketers and has allowed the retailer to target customers with more relevant coupons and advertisements. It is rumored that Tesco will bring the Clubcard to the U.S in order to replicate previous successes. Will it succeed? For now we can only speculate, since the first "Fresh & Easy" stores have yet to open. However, this new retail format may be just what the market needs and could pose some serious issues for domestic retailers already in the market.

Sources:
http://www.thisismoney.co.uk/news/article.html?in_article_id=409178&in_page_id=2
http://freshandeasy.com/