Skip to main content

Tesco Growth Unnerves Wal-Mart Leadership

It’s estimated that Wal-Mart controls more than 40 percent U.S. market share in the overall DVD sales category. That makes the U.S. retailer the market leader, by far.

However, Wal-Mart is clearly watching Tesco’s UK market leadership with increasing concern -- especially since the innovative UK retailer has decided to target the U.S. marketplace for new revenue growth.

According to Datamonitor, UK retailers Sainsbury, Asda (Wal-Mart) and Morrison have appealed to the UK Competition Commission (CC) to slow the growth of Tesco, claiming the leading retailer will see its share of the food and grocery market reach 43 percent by 2010 if left unabated. But given the retailer's increasing focus on non-food, this seems a challenge too far -- even for Tesco.

While Tesco is the largest retailer in the UK by a considerable margin and, unquestionably, has outmaneuvered its competition on almost every front over the past decade, Verdict estimates that its share of the food and grocery market stood at 23 percent in 2005 (excluding tobacco).

As well as falling short of the CC's rule of thumb definition of a monopoly, it makes the chance of Tesco reaching a 43 percent share by 2010 look somewhat unlikely, even under the most optimistic of forecasts. Granted, it’s easy to be very optimistic about Tesco’s outlook.

It is also worth considering that over recent years non-food has taken center stage as the core focus of Tesco's expansion plans. Here the retailer is in little danger of being branded a monopoly. As a whole the retailer's share of the non-food market was 3.7 percent in 2005. When looking at individual categories, Tesco had double digit shares in only two of the markets it operates in -- health & beauty and music & video.

And, looking ahead, the importance Tesco attaches to non-food is set to intensify further. The vast majority of new space the retailer plans to add over the next 5-10 years will be allocated to non-food ranges and Tesco Direct is focused exclusively on the development of non-food categories.

Popular posts from this blog

The $4 Billion Opportunity for Satellite IoT

In an era where wireless connectivity is pervasive, Satellite Internet of Things (IoT) can change industries, offering leaders unprecedented opportunities to drive efficiency and innovation. As industries across the globe seek to enhance operational efficiency and sustainability, satellite IoT emerges as a pivotal enabler. According to a worldwide study by ABI Research, the Satellite IoT market is forecast to reach $4 billion by 2030, with over 26 million connections anticipated. "Prominent satellite IoT providers such as Inmarsat, ORBCOMM, Globalstar, Myriota, and hiSky have been actively working together with their partners to expand their service offerings and enhance connectivity solutions," said Jake Saunders, vice president at ABI Research . Satellite IoT Market Development The satellite IoT market's expansion is largely fueled by its application across key verticals, including agriculture, energy and utilities, fisheries and aquaculture, and environmental monitorin