Lessons from across the big pond

Tesco's entry into the US market is old news now. But I would like to refer to a very interesting article published by The Economist not so much from what Tesco is trying to do but the challenges it faces due to some fundamental differences in the way US Retail Operations are structured in comparison to Europe. Here is an excerpt which I found very interesting
"....In trying to compete with discount retailers such as Wal-Mart and Costco in a large country with good roads and cheap land that lends itself to big-box retailing, America's supermarkets have concentrated mainly on trying to take costs out of their supply chains. Labour is also cheaper in America. This has encouraged supermarkets to make two sorts of food: that which lasts long because it has been dried, canned, frozen or otherwise preserved, and that which is prepared from raw ingredients on site. "

However the preference for organic food and new age stores like The Whole Foods offering a range of pre-cooked food that has a shelf life of a few days, that might be changing.

On the other hand here is the contrast in the environment in which the European retailers compete

"...British supermarkets, in contrast, operate on a small, crowded island with restrictive planning laws. Whereas American stores are good at moving goods hundreds of miles and keeping them cheap, British retailers specialise in regular, frequent deliveries to heaving city-centre stores. Their supply chains are more sophisticated because they have to be. Stores can be so small that they have to switch from selling sandwiches at lunchtime to selling ready-made suppers in the afternoon.
Expensive labour and a shortage of space have encouraged British retailers to seek economies of scale from centralised food preparation. Rather than cooking on site, they make a wide range of meals that can last for a couple of days. These are not just staples such as macaroni cheese or lasagne. A typical London supermarket now stocks more than 50 different meals, including treats such as organic beef in wine, Keralan prawn curry and Asian noodles with vegetables. "

Bloody interesting ainhhh!!!!!!