London, Dec 06 (PRINTWORDS NEWS) -
The UK based retail giant Tesco is planning for opening a range of new supermarket stores across the country before a clampdown thwarts its scopes of expansion. It has applied for more stores than what two of its rival brands have applied. Tesco has more than 75 planning applications that are outstanding. These include both hypermarkets and convenience stores. Compared to this, other retail chains like Sainsbury and ASDA has applied for 45 chains.
As per the recommendations of Competition watchdog the supermarkets will have to undergo a test to prevent opening a new branch in a location where they have presence. Since Tesco is likely to lose a lot from such test it has opposed the move strongly. As of now, the supermarket chains need to undergo a needs test to certify that a new store is required to cope up with increasing demand. Tesco’s new small sized stores named Tesco Express do not fall under the range of this test. From Tesco’s application it is evident that the retail giant wants to open larger stores including some huge sized Tesco Extras.
Tesco, on its part have denied the charge that it is planning for an expansion overdrive. It has questioned the authenticity of the data that shows it has more outstanding applications than the competing brands. A Tesco representative alleged that some of its competitors escape the scrutiny of watchdogs as they apply using the developer’s name. It believes that the competition test is not beneficial for the consumers in the long run and it thwarts the scope for healthy competition.The spokesperson denied charges that Tesco has increased the volume of applications abysmally. He also alleged that the list includes some of the older applications that are no longer valid.
Sir Terry Leahy, the CEO of Tesco has played a major role in the expansion drive of the brand over the previous two years. Tesco is of the opinion that the so called test would be counterproductive for investment in a competitive and well functioning market. If it is implemented strictly, the consumers will be deprived as the stores will not come up at crucial locations. However, the amount of domestic expansion by Tesco has taken the industry insiders by surprise as the entity concentrated mostly on overseas expansion in the last 10 years.
According to the Retail property experts, the supermarket chain is facing a fresh challenge from rivals like Sainsbury which made inroads in areas like Scotland and north England in recent times.Contrary to Tesco, both Sainsbury and ASDA support the proposed competition test. Sainsbury is a bit skeptical about its impact on existing store expansion. A spokesperson for Sainsbury said recently that the test will guard the regional markets from staying restricted to a particular retail chain.ASDA said on its part that the proposed test will help the economy of the country to prosper and the consumers will be benefited. Tesco is considered the biggest retailer in UK and it is unlikely that it will let the rivals grab its market share easily.
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