For the vociferous band of Tesco-haters, waiting for the supermarket giant to slip up on one of its own homogenised banana skins has been a long and frustrating business. OK, you can clutch on to the failure of Tesco to achieve the 4 per cent year-on-year increase in sales during the Christmas period which analysts had predicted (it only managed 3.1 per cent). You can point out that its shares have plunged by 20 per cent since December — but which retailer’s shares haven’t? You can crow that a remarkable number of its executives over the past year have been scattering to jobs in rival businesses (one of them, dammit, to Sainsbury).
But it is all pretty desperate stuff. Tesco still takes £1 in every £8 spent in shops by British consumers. Moreover, in ten years it has successfully built up a network of 1,376 stores outside the UK, which last year generated £564 million worth of profit.
It can’t even seem to bruise itself by stumbling headlong into the US market — a notorious graveyard for overconfident British retailers, as Sainsbury, Dixons and Marks & Spencer can attest. Tesco’s Fresh & Easy convenience stores in California, 55 of which have been opened since November, haven’t yet come a cropper as many pundits gleefully predicted. In spite of one broker’s suggestion that the stores are not performing as hoped, Tesco has been bullish enough to press ahead with a second, vast West Coast distribution centre.
It doesn’t even seem as if Tesco is going to get much of a rap round the knuckles from the Competition Commission, whose two-year investigation into the supermarket sector is due to conclude in May. Speculation that Tesco would be made to sell many of the town-centre convenience stores it has acquired over the past decade appears to be wide of the mark: the Commission’s provisional findings, published last October, ruled that the large supermarkets’ foray into convenience stores is ‘not having an adverse effect on competition’.
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