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February 09, 2006
U.S. supermarkets getting yet another challenger
Apropos of Roben’s entry the other day on challenges facing supermarket chains, today comes news of yet more competition for the industry, already long under siege by Wal-Mart. European grocery giant Tesco says it’s planning to spend over $400 million a year to break into the U.S. market. Tesco says it’s starting with stores in its Express format (only about 2500 square feet). But analysts at AMR Research here in Boston (who focus on IT in retailing) say they expect Tesco’s initial foray to be just a stalking horse for a much bigger entry. They note the company is just as good at using computer databases and real-time info to manage its inventory and supply chains as Wal-Mart. It also emphasizes in-house brands far more than typical U.S. supermarket chains, they say. Not much stock market impact yet: Safeway Stores (SWY) dropped 2% and Albertson’s (ABS) was off a bit today. Kroger (KR) is up about 1%.
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