Tesco To Take Existing Suppliers To The US

Fri, 24 Nov 2006
 
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The number one supermarket chain in the UK, Tesco, is taking two of its favourite British food suppliers along on its trip to the US. The retailer wants to conquer the States by opening a new chain of small sized supermarkets on the other side of the Atlantic next year.

The two suppliers are Natures Way Foods, which produces prepared salads and lettuce for Tesco and 2 Sisters Food Group who are one of Britain's leading poultry processors. The companies have plans to open sites next to Tesco’s planned distribution centre in southern California . Tesco have made it clear that their US expansion strategy is a mixture of establishing a store network and a proprietary distribution system at the same time.

It is the first venture outside of British shores for Natures Way Foods, but the company has already set up a US subsidiary, Wild Rocket Foods, which is in the process of recruiting staff for its operation. The company has enjoyed much success with annual revenue of more than £350m.

Tesco have shown their loyalty in using British suppliers rather than opting for new relationships in the US. Many believe this decision highlights the company’s belief that the prepared meals business in the UK and Europe delivers higher standard products than are currently seen in the US.

Tesco’s plans to open around 150 small market stores are based upon the prepared meals market, which includes salads and cooked chickens. The shops are going to be based in and around the cities of Phoenix in Arizona, Las Vegas in Nevada, and Los Angeles in California.

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