Essay on Tesco

2771 Words Mar 7th, 2015 12 Pages
Retail Case Study: Anatomy of A Tesco Fresh & Easy Neighborhood | | BackgroundA lot of PR has been built around the much debated debut of Tesco in the US. Several sources suggest a $2 Billion commitment over the next 5 years, and stores are supposed to be opened up at the rate of 3 week per week. The company is aggressive about its strategy and is gambling big bucks on their assumptions and understanding of the US food retail market. Success will result in returns of hedge-fund proportions, given the high margins that exist in the fresh and prepared foods and the organic growth that will result from developing a consumer niche of their own. A lot of players in the grocery retail industry including big names like Whole Foods and …show more content…
For food retail, the mantra is still ‘Location-Location-Location’. Demographics are a big part of location. Tesco would certainly have looked at several other factors like distance to the distribution center, proximity of competitors etc., but demographic profile of the future shoppers at these stores is probably the single largest factor that will determine if these stores will achieve the desired dollar sales per foot. This analysis is based on information on the location of the stores and publicly available data on the neighborhood of those stores, primarily Zip Code demographics from the US Census Bureau. Aggregate demographic factors for the store Zip Code were considered. Factors that were considered include Percentage of population by race/ethnicity, Percentage of Urban vs. Rural population in store Zip Code, Percentage of Population by Age groups, gender and level of education, number of housing units in store Zip Code (indicator of density) and Per Capita Income.DemographicsComparing demographics across stores indicate some commonalities across the locations. Overall the stores are not located in the most affluent neighborhoods (with exceptions), but the neighborhoods have a relatively higher density (both in terms of population and

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