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September 21, 2006

US: Tesco format could be bigger than anticipated

Reports are coming in from the US that Tesco, the UK’s leading grocery chain, intends to take over a 32,00-square-foot former Albertson’s store in Glassell Park, Los Angeles, a move that could indicate the retailer intends to build stores bigger than first expected when it enters the market.

Reports are coming in from the US that Tesco, the UK’s leading grocery chain, intends to take over a 32,00-square-foot former Albertson’s store in Glassell Park, Los Angeles, a move that could indicate the retailer intends to build stores bigger than first expected when it enters the market.

Tesco has closely guarded its plans for the US, responding to this latest rumour with a now familiar silence. “Tesco does not comment on rumour or speculation,” the company told just-food. “We want American customers to be the first to see our concept for the US.”

When Tesco announced its intention to expand into the US, it said that it was investing US$470m in developing a format specifically designed to suit the market. The retailer also revealed that its first stores would open on the West Coast, the area where Wal-Mart is weakest. The company is expected to open about 150 stores in Southern California, Las Vegas and Phoenix.

According to a report in the Los Angeles Times, a person familiar with the company’s plans said Tesco was working on what it calls a Fresh & Easy concept. Analysts had speculated that the concept would be based on Tesco’s small-scale Tesco Express stores in the UK, but the purchase of such a large outlet suggests that Tesco could be planning a multifaceted approach, or something different altogether.

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