The Wall Street Journal has a story about how Sainsbury and Tesco differ in their approaches to competing with discounters Aldi and Lidl that have thrown the UK market into turmoil.
The story notes that Tesco is adopting a "back to basics" approach that it believes will drive sales and margins, while Sainsbury is getting into new businesses that will actually give it a more diversified portfolio. Among them - selling home loans, which happens to be a business that it got out of in 2004.
Sainsbury also has spent the equivalent of $1.74 billion to acquire Argos, describe din the story as "a chain that sells cheap furniture, electrical items and other home goods."
The Journal goes on to write that "Tesco and Sainsbury spent the half-decade up to about 2013 engaged in a 'space race' that lumbered them with too many large stores. Selling new products and services is one solution to this problem. But companies often stumble when they enter business areas they only half-know. Sainsbury needs to tread carefully."
The story notes that Tesco is adopting a "back to basics" approach that it believes will drive sales and margins, while Sainsbury is getting into new businesses that will actually give it a more diversified portfolio. Among them - selling home loans, which happens to be a business that it got out of in 2004.
Sainsbury also has spent the equivalent of $1.74 billion to acquire Argos, describe din the story as "a chain that sells cheap furniture, electrical items and other home goods."
The Journal goes on to write that "Tesco and Sainsbury spent the half-decade up to about 2013 engaged in a 'space race' that lumbered them with too many large stores. Selling new products and services is one solution to this problem. But companies often stumble when they enter business areas they only half-know. Sainsbury needs to tread carefully."
- KC's View:
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US retailers should pay close attention.
