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Indies swoop as Tesco retreats from technology

Dominic Sacco
Indies swoop as Tesco retreats from technology

Local PC retailers and resellers are stepping up to fill the space left by Tesco, which is stocking fewer consumer electronics in its stores.

The grocer said it is scaling back on tech to focus on other more profitable categories like food. It has also axed its computer repairs service.

“Tesco’s exit from consumer electronics was inevitable,” Target Components business advisor John Coulter told PCR. “As a non-specialist business with nothing other than its ubiquitous presence and price to draw customers, it was playing in a market that demands specialist knowledge, services and customer support to be successful.

“Tesco, like all big chain retailers, is a master of illusion. Through loss leaders and huge marketing budgets it has duped the public into believing it is good value. Its exit presents genuine opportunities to independents. The challenge will be taking advantage of them. Those near a Tesco should strive to become its new ‘electronics department’.”

Garry Stonehouse from indie retailer Gbiz IT added: “Tesco is all over the place so this is certainly welcome news from our point of view. They have a reputation for selling below cost price which makes the market difficult.”

“As a non-specialist business with nothing other than its ubiquitous presence and price to draw customers, it was playing in a market that demands specialist knowledge, services and customer support to be successful.”

John Coulter, Target Components

Scott Wilkinson from Simply FixIt, which recently opened a new store, commented: “There’s always room for indies. Although Tesco is still selling computers, people will still need to get theirs repaired somewhere so it’ll be very good for us.”

One national account manager told PCR anonymously that Tesco should be commended for trying to do everything and be a one-stop shop, but “going that low on price is just not viable”.

Jon Atherton, group vice president and director at Entatech, said: “I think it’ll have a positive impact for the independent. In one respect it’s sad to see a great British company moving away from the category, but the benefit is hopefully going to be with the independent retailers within the various regions.”

Tesco chief executive Philip Clarke said: “We’re actively withdrawing from non-food categories like consumer electronics. By taking out those high-value low-margin sales, we’ll still make more profit selling food and our business will be better for it.

"Our UK plan is all about food and related general merchandise.”

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Tags: Retail, Tesco, technology

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