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Can Tesco Succeed Where Marks and Sparks Fizzled?

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February 21, 2006

Can Tesco Succeed Where Marks and Sparks Fizzled?

David Kiley

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.

03:58 PM

Brands In Motion

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Hi David,

Not only will that be a vital issue for tesco to attract and retain foot traffic to their stores but also interesting to monitor the cultural clash between tesco and major US food retailers and their reactions.

Posted by: Henrique Pl?ger Abreu at February 24, 2006 09:17 AM

I hope that Tesco does make it in the states! I am an American stationed in England and I love Tesco. Thier service is great, product quality wonderful and best of all....if I can't make it to Tesco's to shop, they deliver to the door. It would be great to come home stateside and have that same service provided. Can you imagine how that service alone would be so helpful to working mothers, shut ins, the elderly and so many more? We sure don't have anything like that now that I know of. GO TESCO !!

Posted by: Debbie Ward at April 4, 2006 03:58 AM

Having known and used M&S in England, we were delighted when, after missing them for many years, they opened stores in Edmonton. As a family of seven we were again able to patronize them regularly and stock up on their delicious foods. Often our main purpose in journeying to Edmonton was to visit M.&S.

When they withdrew from Canada, we were convinced their failure was due to the fact that they hardly,if ever,advertised, whereas all their competitors constantly bombarded the populace with newspaper ads and enclosures.

Long before the fateful day came we used to express concern that if they didn't recognize the North American way of retail business we would lose them. I even wrote to the exec. i/c Advertising expressing these views, obviously to no avail.

I am sure that any U.K. food and/or clothing company who even thought of opening in North America would be well aware of the M&S lesson!

Posted by: Terry Bennett at April 15, 2006 05:19 PM

The British community here in Orange County would welcome Tescos opening here. We ex Brits miss the taste of our homeland food. And will certainly spread the word that you are here. I have only heard a rumor so far so hope you do some advertising. I feel that if M&S had come further south they would have made it in the U.S. But Edmonton was a little too far. Hurrah for Tesco, I applaude you. Rosemary Anderson

p.s. Let us know where you are even by e mail.

Posted by: Rosemary Anderson at April 15, 2007 01:30 PM

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