By George Anderson
Lee Scott, chairman and chief executive officer of Wal-Mart Stores, has pointed out that one advantage Tesco has over his company's operations in the U.K. is its convenience store business. Now, it appears, Tesco is looking to increase that advantage with the purchase of up to 30 convenience stores with gas pumps from WM Morrison.
After the deal is completed and approved by Britain's Office of Fair Trading, Tesco estimates it will have about a six percent share of the U.K. convenience store market.
"This is a small deal that will allow Tesco to convert freehold sites in good locations, with new and conforming forecourts and shops, to its Express convenience format," the company said in a statement.
Mr. Scott, in an interview last week, appeared to signal that Asda may soon enter the convenience store segment in the near future.
"A lot of Tesco’s growth has come from the small convenience chain. Andy (Bond, the chief executive of Asda) and his team have got to look and see where the opportunity is for us with that kind of space," he said.
Moderator's Comment: Will more large chains in the U.S. not currently in the convenience store channel take a cue from Tesco's success in the U.K. and begin testing their own concepts? Which chains do you think would have the most to gain from entering the convenience store business? - George Anderson - Moderator