Is Wal-Mart taking on Tesco as the latter ramps up its US presence? Yes, according to a report in the Financial Times. Wal-Mart is apparently testing four 20,000-sf, grocery-store units to compete with the British retailer’s rollout , which will feature 10,000-sf locations.
The article says that the logo of the new store come “with a stylised tomato, egg and grape topped by a Wal-Mart blue star” guesses that the store will “have a far stronger stress on fresh foods.”
We find this interesting because Wal-Mart already runs a grocery chain, Neighborhood Markets, which has been around since 1998 but only has 128 units. Those stores average 42,000 sf. Of course, Wal-Mart sells groceries at its 2,435 Supercenter locations across the country as well.
It surprises us that Wal-Mart would consider the Tesco presence a threat to its sales in the area, especially because of the competition it already faces from traditional grocers, other discounters, specialty supermarkets, wholesale clubs and other concepts. Or is it making the best, most cautious, move?
Counter Culture 
Wal-Mart already competes in the UK with Tesco, and Tesco is a formidable force there, so I believe that Wal-Mart quite correctly sees them as a legitimate competitive threat. It will be interesting to see how well they do in the US since the Brits often do not do well in their US ventures. I say that as a Brit who has been here for 25 years and watched with interest.