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• According to published reports in the UK, Tesco CEO Sir Terry Leahy has ruled out any “significant” acquisition in the US, but instead will concentrate on expanding the company’s presence in China.

There were numerous rumors about a month ago concerning possible Tesco acquisition targets in the US, with Wegmans and HEB both mentioned as chains of possible interest. Tesco reportedly had a team on the ground in the US performing due diligence, but Leahy says there are no current plans to buy anything there.

• The Observer has an interview with Tesco CEO Sir Terry Leahy, in which he exhibits a certain patient understanding for those who criticize his company for being too big and powerful.

“As a country, we tend to side with the underdog,” Leahy sells the paper. “Tesco is a large and successful business, affecting the whole of society, so there are bound to be questions. It's natural for people to want reassurance that our success has come at a fair price, and not at someone else's cost.”

Indeed, Leahy argues to the paper that “the company's success has had a wider impact, helping to alleviate poverty and improve health and social conditions in deprived areas of Britain.”

Leahy says, “We have made our brand more attractive and this has enhanced our reputation - and we have illustrated that we are socially responsible.”

The Observer writes, “Leahy says there are four main benefits which Tesco (and other supermarket groups) have brought: food affordability, greater choice, high standards of food safety and convenience. He adds that in many cases, prices are falling year on year. He says people have begun to take food price deflation for granted, something which helps to keep overall inflation in check.” And he suggests that maintaining Tesco’s brand advantage is something that requires constant vigilance:

“Brands don't tire, provided they stay relevant, but you've got to pay attention - consumers change quicker than businesses and, if you are not careful, they can leave you high and dry so you've got to work hard to stay in touch,” he says.

• Reports in the UK say that Tesco, which owns the license for eDiets in England and Ireland, will launch a major promotional campaign supporting the program. The eDiets service provides fee-paying consumers with diet choices tailored to specific medical needs or conditions.
KC's View:
Having interviewed both Leahy and his predecessor, Sir Ian MacLaurin (who now is Lord MacLaurin), we remain extremely impressed by the Tesco machine. You won’t find better stores than Tesco runs in the UK anywhere in the world, and we’re a little disappointed that the company hasn’t any immediate plans to come to the US.

Though we wouldn’t be enormously surprised if someday in the not too distant future, a deal gets made that slips in under the radar.