Case Abstract:

This case study focuses on Tesco’s expansion plan and its entry strategy in the U.S. which places it directly against competitor and retail giant Wal-Mart.

Tesco in US Retail Market

UK’s largest retailer Tesco and one of the top supermarket operators in the world, plans to open a thousand-strong chain of discount stores in the US. Tesco plans to invest more than $250m (£120m) [$2.5 billion over the next five years] in its US business launch. This expansion plan and entry strategy places it directly against competitor retail giant Wal-Mart. Many UK retailers have found it difficult to survive or compete in the US retail market. The US retail market is most competitive in the world, a fact well-known to British retailers Sainsbury’s and Marks & Spencer which failed to attract US customers.

Case Study Contents

  1. Introduction – Tesco in US Retail Market
  2. Tesco – Company Background and Timeline
  3. TESCO at a Glance
  4. Localization Strategy – Tesco in South Korea
  5. Tesco’s Business Strategy in the US – Healthy food, No waiting
  6. Store Formats
  7. Financial Highlights
  8. Related Reading
  9. View sample pages of this case study

This case study covers the following issues:

  • Assess Tesco’s globalization strategies
  • Examine and analyze the entry and expansion strategies of Tesco in US
  • Study how Tesco localized its retail practices in US
  • Understand Tesco’s efforts to integrate its global best practices with local strategies in US
Case Study Keywords: Tesco, Globalization Strategy, Localization Strategy, International Business, International Expansion and Entry Strategies, Retail Store Formats, supermarkets

Case Snippets/Updates:

  • The world’s third-largest retailer: Tesco is the world’s third-biggest retailer by sales behind U.S. retail chain Wal-Mart Stores Inc. and French retail chain Carrefour SA.
  • Tesco has 4,331 stores worldwide. In 14 countries, Tesco employs 470,000 people. (Jan 2010 figures)
  • Top five supermarket groups in the U.K. – Tesco, Asda, Sainsbury, Morrisons and Co-op/Somerfield. These five groups have around 85% of grocery retail in the U.K. market.
  • Tesco’s market share in U.K. – Tesco has approx 30% market share of British grocery retail
  • By September 2009, Tesco had around 126 stores open in the U.S.
  • Tesco’s U.S. operations (Fresh & Easy) reported a GBP85 million trading loss in the first half of the year (six months to August 31, 2009).
  • A report on European Retail Forecast by RetailNet Group (RNG) indicates that, by 2014 the top 15 European retailers would capture 66% of retail sales growth (from 43% in 2009). The report covers more than 200 major retailers, 880 store banners (more than 2,12,000 stores) from more than 41 countries and includes major retailers Wal-Mart, Tesco, Aldi and Carrefour. These retailers account for over 47% of all retail sales across Europe.

Additional Reading: Related Cases/Articles on Tesco