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Is Tesco Taking Over The World?

Jan 24 2012

The Tesco Clubcard logo.

Image via Wikipedia

Tesco is one of the biggest grocery retailers in the world. Most people think of them as just a British supermarket, but their reach spans a lot further than that, and they are involved in many more markets than just groceries. Some people feel that Tesco is taking over the world, and that if they continue to expand then they could end up with far too much power.

How Big is Tesco?

Currently, Tesco is the third biggest grocery retailer in the world, if you rank the retailers by revenues. If you consider profits only, then they're the second biggest retailer in the world. They have the largest market share not just in the UK, but also in Ireland, Malaysia, and Thailand. There are Tesco stores in 14 different countries, spread across Europe, North America, and Asia.

Tesco has come a long way since its humble beginnings as a grocery stall in a London market.  Today, the Tesco brand offers more than just groceries. They sell gadgets, they have an ISP, they offer insurance services, mobile phones, petrol stations, and credit cards. If there's a market to be in, there's a good chance Tesco is in it.

If you wanted to, you could probably do almost all of your shopping, even mail order purchases, through Tesco. The Tesco Direct service sells everything from tins of beans to video games, and the purchasing system is smooth too. That's to be expected, though - a company with so much money should be able to get their ecommerce fulfillment systems working properly!

Why Fear Tesco?

The size and power of Tesco is cause for concern for many reasons. For one, the Clubcard tracks your purchases. Tesco has a good explanation for this; if they know what you're buying, they can tailor special offers to your preferences. However, privacy campaigners are worried that if one company knows what you eat, what you watch, what games you play, and where you travel to, then that company has far too much knowledge and power.

While privacy is a valid concern, it's one that many people consider to be vague and debatable. A more concrete and measurable concern is the impact that Tesco has on local economies. Tesco recently started pumping money into new home developments, prompting fears that Tesco Towns may be the future of urban planning. Imagine taking out a Tesco mortgage and Tesco home insurance so that you can live in a Tesco house. You could drive a car (funded by a Tesco loan), buy your fuel from the Tesco garage, and, on days when you don't feel like driving the few hundred meters to the supermarket, you could order your groceries online, with specially tweaked ecommerce fulfillment systems that would recognize that you live close to a Tesco, and offer a bigger range of delivery options. Sure, the efficiency sounds nice, but what's the cost?

When supermarkets, not just Tesco, but any of them, open up in a small town, the local butcher, baker, independent garage and DVD rental store all end up losing out. You lose choice, you lose the friendly shopping experience, and you lose the heritage of your town. Is the convenience really worth it?

Written by Amy Fowler on behalf of Hallmark Consumer Services, suppliers of ecommerce fulfilment systems to firms of all sizes.

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