Wal-Mart Demands Probe into UK Rival Tesco

30 August 2005

Was it the planet's largest retailer and the UK's dominant supermarket chain that inspired Stephen Sondheim when he penned his immortal lyric for 'A Little Night Music'?

Isn't it rich?
Are we a pair?
Me here at last on the ground
And you in mid-air
Send in the clowns

Maybe not. But pleasingly apposite in the light of Wal-Mart's demand that the UK government investigate Tesco's domination of the British supermarket sector. A request likened by one commentator to Genghis Khan urging a probe into the methods of Attila the Hun.

Wal-Mart's diktat was delivered on Friday coincident with a new price cutting campaign launched by its UK subsidiary Asda - number two in the local supermarket stakes, but with barely half the share (16.7%) of Tesco's 30.5%.

According to Arkansas-located president/ceo Lee Scott, the UK government has a duty to act if any chain takes more than 30% cent of the market.

"As you get over 30% and higher, I am sure there is a point where government is compelled to intervene, particularly in the UK, where you have the planning laws that make it difficult to compete," Scott complained.

Parroting the same amelioration used whenever rivals, politicians or consumer groups complain about its business methods, Tesco insists it acts in the best interests of British shoppers.

"Previous Competition Commission inquiries have found that the market - and Tesco - operates in the consumer interest," oiled corporate and legal affairs director Lucy Neville-Rolfe. "It is a competitive market. The consumer is the winner."

Tesco earlier this year surpassed the £2 billion ($3.77bn; €2.93bn) annual profit barrier [WAMN: 13-Apr-05].

Data sourced from BBC Online; additional content by WARC staff