Tesco’s unusually low-profile US expansion srategy is about to take it to Las Vegas, one of the fastest growing cities in the US, in addition to its plans to open stores in the Los Angeles and Phoenix areas next year.
Tesco is the UK’s biggest supermarket chain, and retail analysts predict it will become Britain’s biggest non-food retailer by the and of the year, overtaking Argos Retail Group.
The US push is part of Tesco’s plan to expand in its domestic market and abroad. Tesco is looking for sites in Las Vegas for its planned Fresh & Easy range of mini-supermarkets.
Tesco announced its US plans in March, after conducting comprehensive market research that included a trial store in a warehouse in Los Angeles that looked like a film set. Tesco has not said how many stores it plans to open in the US and declined to comment on its strategy for Lad Vegas.
The company said in March it would invest 250 million pounds a year to fund its US expansion, a budget that should enable it to open as many as 200 stores a year. Las Vegas, with 1.7 million people, is in Nevada, the fastest-growing state in the US. There is intense competition there for new customers between its existing traditional supermarkets – dominated by Kroger and Safeway – and Wal-Mart, the largest US retailer, wich now has about 20 per cent of the overall US grocery market.
Tesco’s strategy is based on creating a range of small stores on sites of about 14.000 sq ft similar to its Tesco Express concept in Europe.
Jonathan Birchall and Elizabeth Rigby
Financial Times.
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