Fifty cut-price US chains target Britain: Retail attack to change consumers' attitudes, report says

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The Independent Online
A WAVE of brash, cheap and aggressive American shopping chains is poised to arrive in the United Kingdom, with a dramatic impact on British retailers and the attitudes of British consumers.

A new survey identifies 50 United States retailers as planning to use Britain as a springboard for their 'attack' on the affluent single market of northern and western Europe. Some - Blockbuster Video, Toys 'R' Us and The Gap clothing stores - are already here. Many more will follow.

According to the survey from the Corporate Intelligence Group, with the American market near saturation point, 'there is a growing realization that the post-recession UK is ripe for an infusion of US price-led, value-for-money, power retailing'.

The report, based on extensive interviews with US firms, says that the American retailers will bring with them new styles of shopping, ranging from warehouse clubs and factory outlet malls to speciality stores - Tandy's Computer City, for example - and 'category killer' superstores, such as Toys 'R' Us, which has 'transformed virtually every country's market it has entered'.

Other imminent entrants include the giants Kmart and Wal-Mart, the two biggest retailers in the US, which are already sizing up the scope for new warehouse club and discounting ventures, in the wake of the arrival last year of Costco's first UK warehouse club, at Thurrock in Essex.

The expansion will be helped by what the survey calls 'the international appeal of American culture'. Based on globally known brands, this is promising new US inroads into eastern as well as western Europe. It is prompted, in part, by recession in the US, coupled with fierce competition and 'approaching saturation' in the American market.

One result will be to move the attitudes of British shoppers - some of whom still like to be seen to pay a full price for goods - towards those of Americans, who have a voracious appetite for cut-price products. Wal-Mart and Kmart, for example, base their success on aggressive discounting.

This should mean lower prices for British consumers but there could be casualties. Many US firms are hostile to trade unions, for example. US retailing has also become so competitive that many American states have been forced to bring in legislation prohibiting 'predatory pricing' - selling products below cost to kill off competitors.

'The problem is often that the victims can be dead and buried before cases come to court, a feature that will send a shudder down the spine of many a self-respecting European multiple . . . Others will not realise what has hit them until too late,' the survey adds.

Among newly-arrived American companies with ambitious expansion plans, the survey also lists T J Maxx (clothing), Walt Disney and Time Warner (entertainment merchandise), Lands End and L L Bean (mail order), Staples (superstore stationery), Sunglass Hut, Nevada Bob (sports goods), QVC (home shopping) and Pier 1 (crafts).

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