Your editorial and feature article about Wal-Mart’s UK invasion highlighted the possible effects on supermarkets here (MW August 19). This emphasis on the grocery supermarkets is because the retail grocery business in this country has a high-profile image compared with other major retailers.
However, Wal-Mart statistics clearly show that food is not the dominant factor in its business. While food comprises only 16 per cent of its business (&£13.5bn), Tesco’s 1999 turnover is &£18.9bn. This comparison immediately puts the “terror in the aisles” into perspective.
Asda has been openly copying Wal-Mart on pricing for at least a year and is unlikely to provide a further price-cutting war. It is in the non-food 84 per cent of Wal-Mart business where retailing here is most exposed. The Wal-Mart sheds are an amalgam of Boots, B&Q, Mothercare, Superdrug, Woolworths and Comet, so it is the likes of Stonehouse and Kingfisher which will take the brunt of the Wal-Mart expansion, assuming planning controls are circumvented.
Tesco’s success is consumer-led and shoppers obviously feel a pleasurable shopping experience is more attractive than that provided by discounters. The recent demise of Kwik Save illustrates this.
I confidently expect Tesco to repel all boarders. If others are submerged it will be because of inefficiency and lack of marketing vision.
R P Savage
KJS Grocery Unit