Private Investor: I'm still a Tesco fan - it's like investing in a way of life

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The Independent Online

So it is with our old friend Tesco, which I was investing in long before it became fashionable. You only have to visit a store on a Sunday morning to see just how well it has come to understand the British retail psyche. Shares are around 310p now, down from highs of 20p or so more.

When I started buying shares in Tesco a few years ago, they were around the 225p mark. In those days they didn't sell the vast range of goods that you can find at the biggest stores today - and available for 24 hours a day, almost seven days a week.

You may think this eccentric, but I have found myself nipping down to Tesco at 2am on a Saturday to buy a length of telephone extension cable to make my internet connection work. In fact, it was an obsessive personality and problems with a new Tesco broadband connection that had me up and sober at such a strange hour. When I complained about my broadband connection, the company eventually responded well and now everything works. I can recommend it.

My point is that pretty soon you'll be able to buy everything you would ever possibly want - and quite a lot of stuff you'll never, ever want - at virtually any hour of the day from one retailer. It is a remarkable phenomenon which, like so much in modern Britain, most people have come to take for granted.

I am old enough to recall when Sunday was only special for me in the sense that there was so little to see or do that it was utterly depressing. Roman Catholic Mass was the high point of the day for a Midlands teenager in the mid-1970s - you get the picture.

I'm glad that Tesco has changed all that. I feel sad about the smaller retailers being driven out of business by it, but I know I have to take my share of the blame there, not as a Tesco shareholder, but as someone who has succumbed to the one-stop shopping way of life.

The odd time I buy fruit at a market or cheese at a farmers' market, say, I find them surprisingly cheap. But like so many people - Tesco has about a 30 per cent market share in groceries - I go to Tesco more out of habit than because of anything else.

What I don't have any time for is Tesco's competitors, such as Asda, owned by the much bigger and mightier Wal-Mart, moaning about Tesco's "power" in an ill-concealed attempt to use the regulatory authorities against a rival.

Being typically short-term, the City didn't like the fact that the Tesco boss, Sir Terry Leahy, sounded a prudently cautious note about the group's immediate prospects, knocked as they will be by higher fuel costs, a general slowing in the UK economy and competition that never lets up.

Long-term, though, there should be plenty of extra growth for Tesco, especially in its ventures in the Far East and eastern Europe. Indeed, I would suggest that the whole of Europe provides an excellent opportunity for the company, as its retail scene is so astonishingly behind the British one. Try buying anything in Germany after 6pm.

I am also most impressed that Tesco has set its face against buying into the US market. The history of British retailers going over there has been almost uniformly awful.

Marks & Spencer's purchase of Brooks Brothers stands out in my mind as an especially harrowing tale. It makes us M&S shareholders wince every time we think of it (I've sold almost all my holding in M&S since).

Next stop? If your conscience can stand it, Wal-Mart. Every little helps, you know.

s.o'grady@independent.co.uk

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