Posted by: David Kiley on February 21, 2006
Businessweek this week has a story on how British retailer Tesco has plans to invade California and perhaps other markets in the U.S.
It’s a dicey proposition for a Britisher to try the cut-throat U.S. food retailing business, but I hope they make it.
They wouldn’t be the first to try. Marks and Spencer some years ago bought the upscale Kings Supermarkets in the Northeast. I liked Kings during the Marks and Sparks years. I can still see the mushy peas and M&S baked goods on the shelves. M&S couldn’t make it work long-term, though, and pulled out. And there are a lot of great stores competing in the premium space—Wegman’s, Whole Foods, etc. I don’t know about Tesco making hay in the super-market arena, but I would like to see them take a shot at the specialty food, small market business, a la Trader Joe’s, and the c-store business. I don’t know about you all, but I love stopping at European convenience stores for a bite. Everything is nicer and better—the selection of foods, drinks and fresh sandwiches. Beats the heck out of the nacho station at 7-Eleven.
Absent from our story is Tesco’s marketing partner. In a previous blog, I mentioned that Frank Lowe, an old boss of mine, had pinched the Tesco account from the agency that still bears his name, Lowe Worldwide. Not only does Frank have a strong sense of the U.S. market from his years working here, but some of his underlings and partners are well-schooled in the U.S. And the agency will likely draw in some very edgy independent ad agencies as partners in the U.S., if not open their own office in California, to help Tesco launch.
As tough as the U.S. retailing environment is, some really smart and edgy advertising from Lowe, who knows how to create that elusive beast, could certainly suck some foot traffic into stores when they open. The question is whether Tesco’s will execute well enough to keep them coming. Make it a proper British establishment, and I bet they do keep coming.