The giant UK supermarket chain doesn’t even rely on traditional groceries to grow sales anymore. It has diversified into everything from original films to planned communities, pet insurance, and telecoms. Tesco has no shortage of other novel ideas: it is also testing “Tesco Extra” in the UK, a store concept offering drive-thru pick-up of grocery orders placed online.
Oh, and did we mention Tesco is expanding into banking, offering such products as savings, home insurance, and travel insurance? And now Tesco has announced that it expects to further expand in financial services by offering mortgages in the first half of 2011.[more]
The thinking is that mortgages “will be consistent with the Tesco brand and be simple, transparent and reward customer loyalty.” Tesco has yet to receive official Financial Services Authority permission to sell mortgages.
Meanwhile, despite some five years of losing money on its American chain of “Fresh & Easy” convenience stores, Tesco now intends to grow the chain in the U.S. from 165 to around 400 stores in the next few years.
Fresh & Easy stores are currently located in Arizona, California and Nevada. Incoming chief executive Phil Clarke could consider closing the chain, but said “it is clear that continuing and moving to profitability is the right thing,” so the expansion remains likely.
Clearly, Tesco has in mind continuing to grow globally despite significant challenges, as reported earlier. Competition in the UK has intensified, and the US has been a disappointment. Asian countries, however, have been a bright spot for the chain, with total sales increasing over 20 percent over six months ending in August, even though results from Japan were weak.