Private Investor: Britain's best retailer is keeping up the pace

What can possibly go wrong for Tesco? As a small shareholder in the company, I would hope not very much. What I hope is one thing. What I know is that Tesco's room for expansion seems to have no limit.

One of the most startling aspects of this week's extremely encouraging set of figures is the way that Tesco is now the market leader in baby goods, beating Mothercare and Boots - combined. From beans to nappies to DVD players, there is scarcely a product that Tesco cannot supply. All credit to Sir Terry Leahy, the chief executive, and all his team for their efforts.

It is all the more remarkable when you consider one of the great business nostrums of our times: that making much money from retailing in today's fiercely competitive globalised marketplace is virtually impossible.

Tesco, for the moment at least, seems to be defying that, although the shares have not responded particularly well to the slew of good news. Still, at about 250p they are well up on the 200p or so average that I've been buying them at over the last year or so and I see no reason to take my modest profits just yet. By the same token, I don't want to invest more now because I do have one worry: the latent threat from Asda, or rather Asda's vast American parent Wal-Mart, which makes Tesco look like a corner shop.

I have been waiting for some years to see whether Wal-Mart/Asda would be able to tear the heart out of British retailing and I'm slightly surprised that the action hasn't started yet. Still, perhaps the message of the Tesco story is that if you have a sufficiently creative set of managers and a well-motivated team then no market is "too tough" to do well in. Contrast, as I have had to, the fortunes of Tesco and Marks & Spencer.

Once Marks occupied a position of market dominance in its field every bit as strong as, if not stronger than, the one Tesco has now. Well, we Marks shareholders all know what happened next. WH Smith, a company I was wise enough not to invest in, has experienced a similarly precipitous recent decline.

So why shouldn't Tesco become the next falling star? No reason at all, except that for the foreseeable future it does seem to have created enough space for itself to exploit the opportunities that are out there. Tesco noticed the potential of the local convenience store market and has expanded here organically and via acquisition. Tesco has also woken up to the small matter of the east-central half of Europe being about to join the European Union, indeed in a week today.

Once upon a time, before 1939 that is, countries such as Hungary and the Czech Republic were comparatively prosperous. Today, even after a decade and a half of freedom, their levels of income are still well below the averages of the west. But, as with Ireland and Spain before them, there is no reason to believe that they will not be able rapidly to catch up with the rest.

It was cheering for me, on a recent visit to Budapest, to see Tesco well represented. I suppose it is too much to hope that Tesco might take over the running of the Budapest airport taxis, which are the biggest rip-off I have ever encountered. I was also unusually heartened to see Marks & Spencer in the fashionable shopping streets of Pest. I hope Magyar women appreciate Marks designs more than their British counterparts.

Indeed it is strange what you see and hear when you are abroad. I was sitting in a hotel bedroom in Doha, Qatar, when I saw on the news (not al-Jazeera but CNBC), that Rolls-Royce, in which I have a small holding, had secured a contract with Boeing to provide engines for the forthcoming 7E7 aircraft, thus cementing its place as the number two aero engine-maker in the world. For a nation that is still used to thinking of itself in relative decline, Tesco and Rolls are two magnificent British successes. Why don't I have the nerve to buy into those stories still further?


Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

    £24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Business Analyst - Financial Services - City, London

    £50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

    SThree: Trainee Recruitment Consultant

    £18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

    Day In a Page

    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
    Public relations as 'art'? Surely not

    Confessions of a former PR man

    The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
    Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

    Bill Granger's luxurious sweet treats

    Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
    London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

    The mother of all goodbyes

    Paula Radcliffe's farewell to the London Marathon will be a family affair
    Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

    Steven Naismith: 'We know we must do better'

    The Everton forward explains the reasons behind club's decline this season
    Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

    Michael Calvin's Last Word

    Praise to Wenger for having the courage of his convictions