Wednesday, January 03, 2007

Tesco is half of new space in UK

While we in the US are watching Tesco's moves as they prepare to open soon here, in its homeland, they are apparently trying to ignite a price war, according to The Guardian:
Britain's biggest supermarket chain, Tesco, is further turning the screws on its rivals by triggering a price war.

It is permanently cutting prices on 600 key items by a total of £80m. The move will be viewed by critics as another example of how the increasingly dominant retailer is flexing its muscles against smaller competitors.
The other point covered in the article is of equal interest -- that half of all new retail space in the UK in the past year was opened by Tesco. This would indicate the likelihood of substantial growth in their current 21.6% market share. Meanwhile, the Competition Commission's report on concentration in the retail sector is expected soon (it has already been delayed).
Britain's Office of Fair Trading highlighted four areas of potential concern when it decided to refer the sector to the Competition Commission in March this year: planning, price flexing, supermarkets' relationships with suppliers, and their entry into the convenience sector.
More about the latest rumors on Tesco's US operations in a later post.

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