The Demise of Tesco?

28 September 2014, 10:57 am
Speciality Bites by Paul Hargreaves

It was amazing how many smiling faces there were around in the speciality food world last week with the bad news about Tesco on virtually every news bulletin for two days at least

I guess our colleagues, customers and suppliers were pleased to see the giant enemy taken down a peg or two after dominating the food spending in the UK for the last decade or two, and reaching a point where the previous CEO claimed that £1 in £7 was spent in his store – this isn’t just food spending but ALL high street spending.

Whilst we may not agree with its principals and reputation for screwing its suppliers so hard some of them go out of business, one has to stand back and admire what is one of the great successes of British business over the last 40 years.  The British aren’t very good at admiring and respecting success and perhaps some of the good feeling last week was seeing a great success story enter into a period of failure.  Don’t get me wrong I am as pleased as the rest of you that what I would consider an unethical company has hit the buffers, but I also think we should admire success where it happens.

However, it is definitely not good for any industry to have one player, or indeed a handful of players, dominating the market as much as the Big 4 supermarkets do (or is it 5 now with Waitrose included?)  And this isn’t just a speciality food person speaking, any market analyst would say that there need to be more than a few companies in a sector.  There will probably be two more soon with ALDI and LIDL set to massively grow over the next few years.  My local Tesco’s is having an ALDI built on the approach road to it – cheeky!

Is there an opportunity for speciality retailers to grow into a small gap left here?  Most definitely yes, but we didn’t need the news this week to tell us that.  The speciality food market continues to grow apace and there is an increasing demand from consumers to buy better food if they can afford it.  Very slowly the great British public is being educated that food shopping isn’t just about saving money, but also about buying quality.

Let’s keep preaching that message! Have a good week.

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