Reacting to news earlier this year that British superstore operator, Tesco, is to open a chain of convenience stores on the West coast of America has bouyed me up for the last few months
Tesco, while being a company of gargantuan proportions – it is the world’s fourth largest retailer – is nonetheless, a company committed to doing business in an ethical manner, and using its size for the good of the community at large Unlike Wal-mart. Ironically, in Britain, Wal-mart CEO Lee Scott, called for an inquiry into Tesco’s market dominance in its own market – 30.5 per cent of the food market as of August 2005. Aside from the obvious ironies – (in the US, Wal-Mart accounts for 60 per cent of the sales for the $379 billion market called Discount Department and General Merchandise stores; Wal-Mart ‘s general merchandise dominance means it has sales nearly 5 times more than their next closest competitor and double the sales of their next 3 closest competitors (Costco, Target and Kmart) combined; Wal-Mart sells more groceries than their top 3 competitors combined; Wal-Mart sells 30 per cent of household staples bought in the United States, including items such as toothpaste, shampoo, and paper towels, according to Business Week) - Tesco has achieved this both organically (meaning that it has done so by natural growth, not by aquiring other companies)and ethically, neither of which is true ofWal-mart. What is more, it has done so on the basis of its core market – the United Kingdom - of 60 million people; whereas Wal-mart has a market of 300 million people. Admittedly, Tesco now operates more stores outside of the UK than inside it. True, Tescohas its detractors; what large company doesn’t? But in researching a letter that I wrote to The Times (UK) – which wasn’t published, by the way – I compared as many court cases or out of court ettlements that the two comanies had faced or agreed to that suggested any unethical or underhand activities. I could not find any against Tesco. For Wal-mart, they were numerous, with the most recent being its hiring, through a sub-contractror, of scores of illegal aliens, and the ongoing class action lawsuit that it discriminates against women employees.
So why has this got me bouyed up, especially since I don’t live on the West coast? Because Tesco again plans to grow in the US organically, and I am longing for the day when Tesco decides to take on Wal-mart in its core market: the big box stores of theMidwest. Tesco has the size and the ability to take on Wal-mart in their own back yard, and win, and to do so ethically and for the genuine good of the community.
