Comment: Tesco: 'Wal-Mart's Worst Nightmare'

This story does a really good job of pointing out Tesco's strong points:
1. Their own brands are really excellent, and do a great job of meeting the needs of customers. The 'Tesco's Finest' brands are as good as you will find, though of course at a premium price. But they are good, and customers actually trust the quality, and so are willing to pay that price. They do a much better job at the higher end than Walmart or Asda, and since that is where the margins are better, that puts them, whether they are number the two or three largest supermarket chain, in a better position EBITDA-wise, which in this market is pretty crucial.
2. They are also a lot more flexible in their format, which they need to be in Europe, where space is dearer. That ability to adapt to different markets with flexible formats also puts them in a good position to challenge Walmart.
3. Finally, Walmart has an abysmal record overseas. They pulled out of Germany, their Japanese operation is, to say the least, far from ambitous, and the only geographies where they have had consistent success is the Americas. I wouldn't say that Tesco is far and away better in this regard, but Walmart is clearly weak.
Link to original story:
http://www.businessweek.com/globalbiz/content/dec2008/gb20081229_497909.htm?link_position=link1