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.”

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