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?

s.o'grady@independent.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

PROMOTED VIDEO
Extras
indybest
Travel
Flocking round: Beyoncé, Madame Tussauds' latest waxwork, looking fierce in the park
travelIn a digital age when we have more access than ever to the stars, why are waxworks still pulling in crowds?
Arts and Entertainment
tv
Arts and Entertainment
Judi Dench appeared at the Hay Festival to perform excerpts from Shakespearean plays
tvJudi Dench and Hugh Bonneville join Benedict Cumberbatch in BBC Shakespeare adaptations
Sport
Is this how Mario Balotelli will cruise into Liverpool?
football
News
Ronahi Serhat, a PKK fighter, in the Qandil Mountains in Iraqi Kurdistan
i100
Arts and Entertainment
Poet’s corner: Philip Larkin at the venetian window of his home in 1958
booksOr caring, playful man who lived for others? A new book has the answer
Arts and Entertainment
Exhibition at the Centre Pompidou in Metz - 23 May 2012
art
News
Matthew McConaughey and his son Levi at the game between the Boston Red Sox and the Houston Astros at Fenway Park on August 17, 2014 in Boston, Massachusetts.
advertisingOscar-winner’s Lincoln deal is latest in a lucrative ad production line
Arts and Entertainment
Alfred Molina, left, and John Lithgow in a scene from 'Love Is Strange'
film
News
i100
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Junior Quant Analyst - C++, Boost, Data Mining

    £25000 - £35000 per annum: Harrington Starr: Junior Quant Analyst - C++, Boost...

    Service Desk Analyst- (Desktop Support, Help desk)

    £25000 - £35000 per annum: Harrington Starr: Service Desk Analyst- (Desktop Su...

    Junior Quant Analyst (Machine Learning, SQL, Brokerage)

    £30000 - £50000 per annum: Harrington Starr: Junior Quant Analyst (Machine Lea...

    UNIX Application Support Analyst- Support, UNIX, London

    £45000 - £55000 per annum: Harrington Starr: UNIX Application Support Analyst-...

    Day In a Page

    Air strikes? Talk of God? Obama is following the jihadists’ script

    Air strikes? Talk of God? Obama is following the jihadists’ script

    The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
    Ebola outbreak: Billy Graham’s son declares righteous war on the virus

    Billy Graham’s son declares righteous war on Ebola

    A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
    Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

    Not even Jeremy Clarkson is bigger than the BBC, says TV boss

    Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
    Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

    Nick Clegg the movie

    Channel 4 to air Coalition drama showing Lib Dem leader's rise
    Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

    Philip Larkin: What will survive of him?

    Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
    Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

    Waxing lyrical

    Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
    Texas forensic astronomer finally pinpoints the exact birth of impressionism

    Revealed (to the minute)

    The precise time when impressionism was born
    10 best men's skincare products

    Face it: 10 best men's skincare products

    Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
    Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

    We know all too much about the cruelty of Isis – but all too little about who they are

    Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
    Neanderthals lived alongside humans for centuries, latest study shows

    Final resting place of our Neanderthal neighbours revealed

    Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
    Scottish independence: The new Scots who hold fate of the UK in their hands

    The new Scots who hold fate of the UK in their hands

    Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
    Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

    Blight club: Britain's ugliest buildings

    Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
    eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

    eBay's enduring appeal

    The online auction site is still the UK's most popular e-commerce site
    Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

    'Lack of ethnic minority and black faces on TV is weird'

    Culture Minister Ed Vaizey calls for immediate action to address the problem
    Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

    Magic circles: Artist Olafur Eliasson

    Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention