Tesco this week denied a move to the US was inevitable, but confirmed that former trading director Colin Smith was on a fact-finding mission (The Grocer, May 7, p4).
Tesco international operations director Philip Clarke said it was possible that Smith “could pop up anywhere in the world” as he researches global opportunities.
However, sources this week told The Grocer that Smith was in Orange County, California, working on what is thought to be a sourcing operation. Tesco also has a team operating out of New York. “A move by Tesco into the US would open up a new front. It is a totally new market where Tesco feels it can add value,” said one City analyst.
He said the weak dollar enhanced Tesco’s buying power, but shareholders would be nervous about the cost. “They would be jittery if they did a dramatic acquisition. If it is £300m, not £3bn, the logic is there.”
An acquisition of a small chain on the East Coast made sense, he said, as Wal-Mart had less presence. Other suggestions have included a collaboration with general merchandise retailer Target or takeover of Midwest hypermarket chain Meijer.
>>p6 IGD Global Retailing 2005, p32 Analysis
Tesco international operations director Philip Clarke said it was possible that Smith “could pop up anywhere in the world” as he researches global opportunities.
However, sources this week told The Grocer that Smith was in Orange County, California, working on what is thought to be a sourcing operation. Tesco also has a team operating out of New York. “A move by Tesco into the US would open up a new front. It is a totally new market where Tesco feels it can add value,” said one City analyst.
He said the weak dollar enhanced Tesco’s buying power, but shareholders would be nervous about the cost. “They would be jittery if they did a dramatic acquisition. If it is £300m, not £3bn, the logic is there.”
An acquisition of a small chain on the East Coast made sense, he said, as Wal-Mart had less presence. Other suggestions have included a collaboration with general merchandise retailer Target or takeover of Midwest hypermarket chain Meijer.
>>p6 IGD Global Retailing 2005, p32 Analysis
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