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9 April 2013 - 4:51am | posted by | 0 comments

Can it be that US customers really just want a bargain?

Tesco: Pulling out of USTesco: Pulling out of US

What is it with British retailers and the American market? With the news that Tesco faces a £1 billion writedown on its six-year-old American venture Fresh & Easy, they join other giants, successful in the UK, who have caught a cold in America. Both M&S and Sainsbury pulled out of the US in the past, licking their wounds.

Now Tesco is going.

Do British marketers just not get what the American public wants wants? Could it be bargains? Or could it just be that the Americans take a long time to warm to anything new?

On the face of it , Tesco got a lot right.

They aimed their push for California and the American West, where it might have been thought a more sophisticated public would have gone for their menu of fresh food delivered in a much smaller setting than the traditional US supermarket.

But customers complained about not enough coupons - and self checkouts (with no choice) were not popular.

Yet in six years 200 stores shot up, employing 5000 people. Some were at long last beginning to make headway, although not fast enough for the British parent. Now German retailer Aldi is one name in the frame for a takeover.

For years Sainsbury owned the Shaws supermarket chain. It never really flew , squashed by price-led competition . Even today the new owners haven' t got it. My local Shaws sits with a big empty car park while 500 metres away , the Market Basket chain has customers circling for a parking, space.

You pay a dollar less for milk at Market Basket than at my shop down the street, and $2 for Carrs English crackers, half the price that they are elsewhere. Bargains anyone?

You don't even have to go actual shopping to spy the bargains . They are delivered with the weekend newspaper , leaflet after leaflet overflowing with cut prices AND COUPONS.

It isn't only the Brits who don't get it. Apple stores genius Ron Johnson, who became boss of giant chain JC Penney saw sales plunge after he abandoned sales and bargains for "fair and square" pricing .

He later changed course- but last night came the news that he had been replaced by the man who went before him .

Of course, there's always the case that disproves the journalistic theory . Whole Foods Market is a very upmarket natural foods store - so upmarket that customers refer to it as "Whole pay-check." It's now in the UK as well, of course And it's never been busier.

I can understand Tesco being frustrated.

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