Tesco Faces Challenges Before First Store is Opened
By George Anderson
It has yet to open its first convenience store in the U.S. and already Tesco is under fire for the decision.
According to a report from The Mail, Safeway is “evaluating the relationship” it has with Tesco in the Grocery Works home shopping business. Tesco took a 35 percent stake in the venture back in 2002 and has been providing staff and management advice for running the business. Tesco’s own home shopping service in the U.K. is often presented as the ideal for internet grocery businesses since it has been able to produce profits when others have not.
Another Tesco investment, the customer loyalty consultancy of Dunnhumby, is in danger of perhaps losing Kroger as a customer because of the chain’s unhappiness with the British retailer’s announced plans to enter the U.S. market.
Under a deal agreed on last week, Tesco will increase its stake in Dunnhumby from 53 percent to 84 percent. Tesco remains confident it can seek to grow outside the U.K. without jeopardizing the Dunnhumby business.
Moderator’s Comment: What is your take on The Mail article? What does it mean for the British chain and the supermarkets currently doing business
with Tesco and Dunnhumby in the U.S.? –
George Anderson – Moderator