Vegas Show Girls Strip Tesco

Religiously, in England, every Sunday after Sunday school, my daughters demanded to go to the High Wycombe Tesco for tea (the village pub being closed, of course, until later). Then, after they had their scones and darjeeling, we filled the trolley with our weekly necessities.

Now, I read that Las Vegas is going to get its Tesco. So Vegas show girls will soon have their own opportunities to stop for crumpets and coffee after a long Saturday eve. And it's not just Vegas. Clearly, Tesco sees the wild American West as their manifest destiny. Stores are planned for Phoenix, San Diego and Los Angeles.

Edward Kelly, an analyst at Credit Suisse, said that he believes Tesco's U.S. stores will be a hybrid, bridging the gap between traditional grocers, such as Kroger Co. and specialty supermarkets such as Whole Foods Market Inc. and privately held Trader Joe's, while adding the appeal of mass market stores, such as Costco Wholesale Corp., Target Corp. and Wal-Mart Stores Inc.

Well, Mr. Kelly has managed to squeeze every single notable retailing format into a single observation. But surely Tesco cannot fill that gap, whether it is as big as the Grand Canyon or as narrow as Jerusalem's proverbial Eye of the Needle gate.

Tesco confirmed last week that its stores would be just 10,000 square feet, making them much smaller than a traditional 45,000 square-foot grocery store. The stores, which are smaller than supermarkets or mass market stores, are to start opening later this year. Hmmnn, sounds similar to the Tesco Metro format in the UK.

How can you be successful in this kind of format? Focus. Focus on what the customers in your geographic really need and really would love to have. Tesco's house has many mansions, and you can bet that, like any very smart builder, they will tailor their offerings. Take a look at Tesco's web site (www.Tesco.com). They sell everything. Their challenge is ensuring they have the right things in their small format. Here is where CPG manufacturers can provide a value-added benefit to their retailing partner, demonstrating their own savvy.

Last September, I wrote about CPG manufacturers letting drug retailers control the shopping souk, pointing out that meeting consumer demand trumps promotions and the use of merchandising forces to supplement poor retail executions on the part of retailers.

I doubt that Tesco will suffer poor execution. I can't see Tesco lurching around the American West and making, at once, both naive and egotistical mistakes like the larger-than-comic-life English Berrybender family in Larry McMurty's eponymous trilogy. Though Tasmin Berrybender is hotter and smarter and tougher than any Vegas showgirl.

Tesco's challenge to CPG manufacturers is for those manufacturers to be able to recommend the right sku's are in the right geography (both in town and on the shelf) for Tesco. Data on placement, turns and inventory won't be enough. CPG manufacturers need to think about the shopper, the shelf and their leadership. In this case, strategy is a plan for resource allocation decisions that will determine the nature of success on the shelf.

I would recommend that manufacturers take the time to study and to develop shopper insights and cogent strategies for working with Tesco. In that way, a real relationship that can build into a real mutually beneficial partnership can be established with the chain and its future shoppers.

This would also provide a wonderful reason to do store checks in the UK in advance of meeting with Tesco's US management. But not for me. I am heading for Las Vegas. After all, Tesco (at this point) is calling its new U.S. stores the "Fresh & Easy Neighborhood Market."