Tesco, the supermarket retailer, has just announced that it is pulling out of the U.S. market and closing its 199 Fresh ‘n Easy stores, at a cost of £1.2 billion. Clearly this chain got its international expansion strategy wrong in this case.
This has lead to an article on the BBC Business website analysing why some UK. retailers have been successful (Topshop, Pret a Manger), whereas others (like Tesco) have not. It seems the key factors are:
- understanding that the U.S.A. is not a single market – consumer density and behaviour varies widely from one state to another;
- entry point – choosing the right city in which to launch the brand;
- location of outlets;
- choice of merchandise.