Tesco's Leahy Sheds Light on U.S. Strategy

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Tesco's Leahy Sheds Light on U.S. Strategy

LONDON - As the launch of is U.S. invasion nears, the man behind the plan, Tesco's c.e.o. Terry Leahy said he expects to flourish in the U.S. only by bringing innovation to the market.

In an interview with the Wall Street Journal, Leahy said the U.S. market rewards innovation well, and thus Tesco's strategy has been to "research and design the perfect store for the American consumer in the 21st century."

The company's $84.9 billion in annual sales comes already from five different types of stores, ranging from small convenience shops to large superstores. This flexibility allows the company to adapt to new markets, such as the U.S., where it plans to open only 10,000-square-foot stores, smaller than typical U.S. supermarkets but bigger than U.S. convenience stores.

Said Leahy: "There is no shortage of stores. But it is a place that rewards innovative retailers, so if you do something different, you get rewarded for it. Retailing returns in America are quite good by international standards."

Asked about taking on Wal-Mart in its home country, Leahy said, "Wal-Mart is a great retailer, but America is a big place. The part of the market that we are addressing, which is convenience, is an underinvested part of the market. And I think there is plenty of room in the market now."

Asked whether Tesco has American ambitions beyond the West, he said, "We're starting in California, Arizona and Nevada, so there is a lot to get our teeth into. But hopefully, the format will have a wider appeal than that."
--Courtesy of CSNews, a Nielsen Business Media publication