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How ironic then that he is now gunning for Tesco and its chief executive Sir Terry Leahy. A UK market share of more than 30% is too much, says Scott, and the government should do something about it.
Meanwhile, Scott says he is fed up trying, and failing, to get new big spaces for his Asda stores. So he is going to look at moving onto the high street. The message for the Office of Fair Trading (OFT) is clear — you have let Tesco buy convenience stores, so you should do the same for us.
The American is too polite to declare that he is putting his tanks on Leahy’s lawn, but he might as well have done.
In an industry in which public slanging matches are commonplace, such comments would not merit much attention. But supermarkets are different. To be sure, they are awful about each other in private, yet in public usually maintain a dignified silence. Tesco is a formidable machine that we seek to emulate, is as far as Asda and others normally go.
Take JSainsbury. Under Justin King’s youthful and energetic leadership the rot has been stopped, and he can begin to aim to become the second-largest supermarket group once again. But under the current regulatory environment, he has zero chance of claiming back the No1 slot from Tesco.
I am sure King has private concerns about “unfair” competition rules. The OFT is responsible for ensuring fair play in the industry, but some think it should be renamed “Only Fair to Tesco”.
A 25% market share has traditionally been seen as the most one company should be able to accumulate. Yet Tesco skipped through that long ago.
The regulator may well have stopped Tesco from buying Safeway, leaving the field open to Wm Morrison. But it has done nothing to stop Leahy hoovering up scores of convenience stores.
Some will write off Scott’s comments as an attempt to shift attention away from his own domestic public-relations difficulties. But not Leahy. He knows how well-connected Scott and Wal-Mart are in Downing Street, where there are concerns about how powerful Tesco has become. How long will it be before Tesco uses its market position to put up food prices, some in government ask.
Fortunately for Leahy, there is no concrete evidence that consumers are worried about the market-share strength of Tesco, its profits (more than £2 billion last year) and its attitude.
Nevertheless, the quest for more space is taking Tesco into new territories where it risks antagonising consumers unused to seeing its red and blue colours. Plans to build stores over railway lines have already backfired, and the move onto street corners is becoming an issue.
Consumers have long had a love-hate relationship with Tesco — they adore the quality of the food and pricing, but detest the lack of choice of store.
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