Simon English: New boss Clarke should pull the plug on Tesco's costly American adventure

Suggested Topics

Outlook: There was always a coals-to-Newcastle, fish-to-Iceland feel about Tesco's plan to crack the US supermarket industry. Just on the bare face of it, even if you'd never visited America, you might quickly reach the view, based on what you've read and seen, that these folk are not short of food.

Tesco's approach seemed cocky, hubristic, right from the start. They had done research, they said. There were huge gaps in the market. Tesco was going to show those Yanks how to run a proper food business. They'll thank us for it.

If they'd only but asked. On the basis of my own, reasonably rigorous research, I could have told them this: there is loads of food in America and nearly all of it is better than what you can get in Tesco.

If that sounds flippant, it's a semi-serious point. Walk into any local deli anywhere in America and order a sandwich. It'll be better than the UK equivalent. Much.

Pick any US restaurant you like outside of New York (let's try to be fair) and compare it to any UK restaurant outside London. The American one is better.

Supermarkets in America are better. The service you get is better. So is the food.

Even Kentucky Fried Chicken is better. You can get the chicken grilled and nicely wrapped to take on a picnic. It's way better.

The state of Tesco's American adventure rather got lost in last week's profit warning, and in the inevitable billions-wiped-off stories that seemingly must accompany any fall in a share price.

It turns out that Tesco is shutting another 12 stores in California, Nevada and Arizona on top of the 13 closed by the company in 2010 as it seeks to stem losses.

So far, Britain's biggest supermarket is reckoned to have chucked about £700m down the trash can seeking to establish Fresh & Easy – that's real money, even for Tesco.

It's increasingly tempting to conclude that Sir Terry Leahy ended his 14-year reign at the company precisely because he could see that his US plan wasn't going to work out, and figured that he'd rather see someone else take the blame.

It seems that those long stretches of food desert – areas without a proper supermarket – that Tesco had identified as fertile ground were without major food suppliers for good reason. No one lives there. At least, no one with any money.

Again, this also looks like the sort of information that could have been gleaned from a quick trip down the highway (the roads are also better, by the way).

Tesco doubtless employed expensive consultants before it embarked on its scheme, but if they did any actual research, they seemed to have missed some fairly basic points.

Will it give up? The temptation for the new chief executive, Philip Clarke, to do so must be strong. If he scraps the American arm quickly, he can let Sir Terry take the heat. Leave it much longer and he owns the problem.

With the company admitting it has lately lost its way in the UK and under pressure from City investors to put things right sharpish, cutting his US losses would at least leave him one less thing to worry about.

Tesco tries to be upbeat on the issue, insisting it is getting the American stores right.

It seems unlikely that Mr Clarke is entirely convinced that Tesco can crack it.

Independent Comment
blog comments powered by Disqus
Career Services

Day In a Page

Child of the revolution: the Burmese family that democracy brought back together

Home of the free

The Burmese family that democracy brought back together
Cannes review: Canine accolade and Hitler's return are high spots amid the gloom

Cannes review

Frocks, canine accolade and Hitler's return
Robert Fisk: The going price of getting away with murder... would $33m be enough?

The going price of getting away with murder

Robert Fisk: The long view
Principled Skinner rises above the fray

Principled Skinner rises above the fray

Andy McSmith meets Dennis Skinner
Patrick Cockburn: I fear this terrible massacre will be the beginning of a long civil war in Syria

Patrick Cockburn

I fear this terrible massacre will be the beginning of a long civil war in Syria
Hardeep Singh Kohli: For me, it is all about 'Gregory's Girl', a record of first love

Hardeep Singh Kohli

For me, it is all about 'Gregory's Girl', a record of first love
Christian Louboutin: 'I don't think comfort equals happiness'

Christian Louboutin interview

'I don't think comfort equals happiness'
Happy birthday, Hotel Babylon!

Happy birthday, Hotel Babylon!

Hollywood's home to the A-list celebrates 100 years of discreet luxury
Rupert Cornwell: Low-rise capital could finally reach for the sky

Rupert Cornwell: Out of America

Low-rise capital could finally reach for the sky
The secret life of the red carpet

The secret life of the red carpet

As Cannes reaches its climax with the Palme d'Or and the celebrities gather in London for the Baftas tonight, Kate Youde and Jack Dean investigate the real star of the show
It's not easy being Professor Green: The rapper, the heiress and a drama made in Chelsea...

It's not easy being Professor Green

The rapper, the heiress and a drama made in Chelsea...
Hardcore, hard-wired: How the prevalence of porn is changing our everyday lives

How porn is changing our lives

It's everywhere - from pop videos to fashion magazines to the theatrical stage.
River Phoenix: the final reel

River Phoenix: the final reel

Twenty years after the actor's death, his last film is to be released
Facebook: The shares shenanigans

Facebook: The shares shenanigans

Investors are crying foul over the huge losses they incurred when the social network site floated on the stock market last week
Up and away – how '7 Up' went global

Up and away – how '7 Up' went global

As the last episode of Britain's '56 Up' airs, the first episode of '28 Up', from the former USSR, starts. Then there's the US, Japan, Germany...