Comment: What next for Tesco and big box?

A few years back, it might have been difficult to imagine taking out a Tesco mortgage and many might have been cautious about doing so. Equally, it would have been hard to imagine shopping a Tesco clothing range without necessarily being aware of its retail provenance. Yet today, taking out a mortgage from the UK’s biggest retailer or shopping an F&F store (in the Czech Republic and Poland) in which no in-store mention is made of Tesco, is probably regarded by many as a commonplace.

To this might be added its takeover of garden centre chain Dobbies and the latest instalment of the gradual balkanization of Tesco’s UK retail presence is the opening last week of Harris & Hoole, an “artisanal” coffee shop in Amersham, in which the retailer has taken a minority stake. There was a time, not so long ago, when this apparent fragmentation of a retailer’s offer would have been regarded as little less than flailing around and what was wrong with putting everything under one roof and one name? Surely that would be more convenient.

This is readily countered by the near ubiquitous accusations that the UK has become ‘Tescoland’. By moving into other areas, buying existing businesses and concentrating on supermarkets, rather than hypermarkets, Tesco is slowly moving away from a land-grabbing image and re-establishing itself as a destination that shoppers might want, rather than need, to visit.

The tendency also chimes with the movement by retail as a whole away from the very large towards the more palatably bite-sized. Best Buy, of course, stands as a dire example of the perils of corporate hubris and a belief that biggest is best, here and in the US. And yet some retailers continue to create edge-of-town flagships where what is created is difficult to replicate on a more modest scale and which divert resources from elsewhere.

This might be said of the new, excellent-looking Mothercare store in Edmonton, although there are some features that would certainly work in its smaller branches. The larger point however is whether the day of the ultra-large category-killing store has come, been and gone. If this really is the case, in spite of the ease of parking and all-round convenience, retail parks with their reliance on out-of-town tenants could come under the cosh sooner rather than later.