Tesco sets sights on American expansion with hit-list of stores

The supermarket group is believed to be targeting medium-sized US rivals with sales of about $10bn (£5.8bn). Analysts said regional players such as Texas-based HE Butt, Giant Eagle in Pennsylvania, and Wegmans Food Markets, based in New York State, were all potential targets.

Sir Terry Leahy, the chief executive, is thought to be keen to pull off a major deal before handing over the helm of the world's fifth largest food retailer. Yesterday, Sir Terry rubbished a report that he was planning an imminent departure. "There's no truth in those stories at all," he said.

Although Tesco has been looking at the US market for the past two decades, it has intensified its focus this year, sending scores of senior executives over there for extended stretches.

But it is struggling to identify any companies that would make a good fit at the right price. Most of the mid-sized, regional players are family owned, and not for sale. The Meijers, who own Michigan-based Meijer, turned down a recent approach from Tesco.

One food retail analyst said: "They will make the move at some point because they need to grow. There would be a lot of potential from buying a small to medium-sized chain. But they need to go somewhere they won't meet Wal-Mart head on, such as California or the North-eastern Seaboard."

As with all its other overseas ventures, Tesco would probably seek to create a joint venture by taking a minority stake in the established chain. Its Tesco.com arm already owns a stake in California's Safeway's online grocery business, GroceryWorks.

Jonathan Pitkanen, supermarket analyst at the ratings agency Fitch, said: "Tesco would struggle to find suitable targets. It would need a big box player that sells a mixture of food and non-food ... It would be a very high-risk strategy. It has already got pins in enough countries on the map. Why would Tesco want to expose itself in a market where it may come unstuck?" A spokesman for Tesco said: "We would never say never."

The IGD, the grocery industry think-tank, predicted half of all Tesco's stores would be based outside the UK by 2010 in a report released this week.

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
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.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral