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The Los Angeles Times reports that Tesco plans to take over a 32,500 square foot former Albertsons store in Glassell Park, a unit that is at least twice the size of the stores that Tesco was expected to open up in the market early next year.

Tesco is not commenting on the acquisition, just like it has not commented much on the kinds of stores it plans to operate in the western US, other than to define them as “convenience stores” that will be a "new format … designed for the American market." Tesco is spending about $500 million to enter the US marketplace, and has said that it believes it can be profitable within two years of opening.

According to the Times, “The company has said that its U.S. stores would be based on its Express format in Britain, suggesting to analysts that they would be about the size of a typical Trader Joe's grocery. Like that Monrovia-based chain, Tesco Express sells fresh produce, meat, packaged goods, prepared foods, wine and other beverages.

“Whatever formats it launches, Tesco said it was using extensive consumer research to tailor the stores to American tastes, including building a mock up inside an unidentified warehouse in the region.”
KC's View:
It’ll be interesting to see if Tesco is thinking about using the same “satellite” strategy that it has used to great effect in the UK – operating superstores and supercenters in specific locations, and then surrounding them, in essence, with Metro stores and Express stores with more localized approaches. These are remarkable stores that always have impressed us during our visits – and it also has been interesting to see how the company has evolved over the past 15 years or so, building on past successes while still being willing to innovate.

Tesco’s US stores may resemble the Express format, but we suspect that they won’t replicate that experience…simply because it may not work for a US consumer. Whatever they do, it’ll be different – and will shake up the marketplace by starting from scratch instead of being locked into old-world merchandising and marketing schemes.