I have long commented on the questionable wisdom of Tesco entering the US. Given the choice of markets in across the globe, why would Tesco (the retailer that is ‘good’ but certainly not ‘unique’) enter the already crowded retail market of America – crowded actually with some very good grocery retailers of their own. It is very strongly my view that there are many countries in Asia particularly that hold far greater promise. What is also striking is their entry strategy, departing from their usual acquisition followed by growth, the enter with nothing and build up all the expensive infrastructure themselves – the expensive way. I have felt like a lone voice, but am reassured this week by the comments made by Warren Buffett (huge financier & speculator) which indicate that I am not alone. Buffett described Tescos US entry as ‘foolhardy’. Frankly I find it very hard to imagine a good business case for the US entry, and would not be surprised if they retreat loosing many millions of their investment in the process. Of course it could also be that I’m wrong and that Tescos make a success of it, but I would still maintain that there would have been better investment markets out there that would have provided a stronger short, medium & possibly even long term return.
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