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'Bring it on, Tesco'

by Ben Furfie
Monday, May 12th 2008 at 12:43PM

'Bring it on, Tesco' As Tesco reports a 31 per cent growth in its consumer electronics division in the last year and a continuing rise in laptop sales, the independent and specialist retail sector has responded with the clear message that it will not be muscled out of the market, despite the huge buying power and retail presence the supermarket goliath is levelling at the industry.

The supermarket's IT buyer Matthew Leeser told PC Retail: "Laptops have undergone significant growth over the past year for Tesco and have been a key factor in our continuing strong growth in the computing and electricals market. We have worked hard to try and cut through the techno-jargon to make purchasing decisions simple. Naturally I can't divulge our strategy in too much detail other than to say we have some exciting plans ahead."

While Tesco has proved its ability to shift huge amounts of low price PCs, vocal members of the independent and specialist retail sector think this 'pile 'em high, sell 'em cheap' strategy will only boost their own businesses by bringing in large amounts of repair and upgrade work – a service it believes supermarkets cannot compete with.

"Competition is nothing new and it is constantly evolving," said Rob Forbes, head of PR at DSGi. "Selling PCs is not a core supermarket focus and so in reality we can't foresee them muscling specialists out the market. There will always be a place for the car supermarket as there is for the dedicated car dealer – we operate in a dedicated space and so can offer value and support to customers over their IT purchase."

While the PC World, Currys and Dixons parent may be in a better position than most to battle supermarket growth, many in the independent sector are similarly defiant.

"The more [Tesco] sales the better," said Matthew Woolley, owner Forum Computers in Lincoln. "It's more repair work for us. It's what we do."

Simon Aronowitz, managing director of Support Lounge in Middlesex added: "Tesco is apparently shifting low-end units to meet a low price. If this is the case, then in my experience, the purchasing customer needs to be aware that they are not getting a fully specced machine. We clean up on the inability of other firms to provide such services in a competent, timely and service-tastic manner."

However, Tesco has had the capability to offer such a service since it bought PC Guys in December last year – and some fear that it is with this that Tesco could create the most damage. "Once established, I see [PC Guys] as a major threat to all us indies," said Norman Ellis, owner of Albatros Computers in York. "I also believe that the other High Street massives will feel threatened by Tesco's arrival in the sector."

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Tags: Retail, Tesco, independents, defiant

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