Tesco tries to allay fears over Asda

Tesco chief executive Terry Leahy has told managers not to panic in the wake of Wal-Mart’s &£6.7bn takeover of Asda.

In a memo designed to reassure general managers, the Tesco boss says it will be “business as usual”.

At one point in the memo, Leahy is quoted as saying: “It should be remembered that most of our customers do not live near an Asda.”

Asda’s biggest concentration of stores is in the North, while Tesco’s customer base in largely in the South.

However, industry sources say it shows Tesco is worried about the impact Wal-Mart will have on the UK market. The takeover is widely expected to lead to a savage price war.

Leahy’s reassurances have been accompanied by a fresh barrage of press ads in Tesco’s most recent “Permanently low prices forever” campaign. In one execution, Tesco directly compares its cut-price batteries with Asda’s.

Tesco denies the advertising is a reaction to the takeover. According to one newspaper, the space was booked in the same week that the takeover was announced.

A Tesco spokeswoman says: “The ads were planned several months ago… it is not the first time we have compared our prices against those of another retailer.”

Latest from Marketing Week


Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now


Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.


From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.


Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email customerservices@marketingweek.com

If you are looking for our Jobs site, please click here