Wal-Mart, Soured by Tesco's Strength, May Explore C-stores in U.K.

BENTONVILLE, Ark. -- As a company that has been accused of muscling out its competition here in the States, it's almost shocking to hear Wal-Mart c.e.o. Lee Scott complaining about another retailer having too much market share.

But that's just what Scott did, in an interview with London newspaper The Sunday Times. Scott, whose company owns Asda in Britain, said that it was time for the U.K. government to take action; typically, the government set a ceiling of 25 percent market share. "As you get over 30 percent and higher, I am sure there is a point where government is compelled to intervene, particularly in the UK, where you have the planning laws that make it difficult to compete," said Scott, referring to Tesco's dominance in market share. "At some point the government has to look at it."

Unlike smaller American companies that for the most part have unsuccessfully protested to the U.S. government about Wal-Mart own incursions into market share, Wal-Mart's bellyaching is likely to be taken seriously by the British government, with which Wal-Mart has a good working relationship, according to British newspaper acounts. Asda is Britain's No 2 supermarket group, with 16.7 percent of the food market.

In addition to Scott's concern with Tesco's dominance, he also complained of Asda's inability to secure new big spaces for the chain's stores. With Tesco now snapping up convenience store chains, Wal-Mart sees smaller formats than Asda as fair game, too. "Asda has a wealth of good talent, we are not in the least bit panicked," said Scott. However, Wal-Mart and Asda are now looking at developing new formats -- including small convenience stores -- for the British market, according to reports.

Wal-Mart does have strong convenience store experience in its past from which to draw. From 1990 to 2003, it owned McLane Cos., the largest convenience store distributor in the U.S.; and its partnerships with petroleum giants Murphy Oil USA and Tesoro educated the company in fuel marketing.

If its British convenience stores succeed, that might spark interest in bringing the format back over the Big Pond. "Wal-Mart is a fast study, and would be successful in any format it chooses," said Maureen Azzato, v.p., publisher, and editorial dir. of Convenience Store News. "There was some concern Wal-Mart was looking into convenience when the company first bought McLane, but nothing happened. But the company has grown since then -- and there are only so many supercenters you can squeeze into an area."
-- Joseph Tarnowski
This ad will auto-close in 10 seconds