Meanwhile, Tesco has problems. It is not doing too well in the UK. Its experiments in the US are not bringing in the big bucks, and the company generally seems to have lost focus. A fund manager at Legal & General Investment Management was recently quoted in the ‘Guardian’ as saying the company: “Needs to think long and hard about what it wants to be… Can it be everything to everyone, or should it focus on its gem, the British grocery business? Of course, this is likely to raise questions about other areas of the business, such as America and the bank.”

Well, Tesco is responding. Plans to open more of the giant Tesco Extra stores have been put on the slow burner, and some of its more ‘out there’ ideas have been put on hold.

But here is the snag: Tesco has limited scope to expand in the UK. It is so big now, it is hard to see it grabbing yet more market share, and if it did, the regulators would have something to say about it. The truth is that nothing lasts forever, and Tesco’s magic formula – the one that made it such a big hit – is now commonly understood by its rivals.

But look overseas, and the store still has lots of potential. Research recently published by IGD found that Tesco is the fastest growing of the world’s four largest retailers. It said: “Tesco’s international markets, particularly China, Turkey and India, will be a key element in driving their long-term growth and returns. The company will try to replicate its successful concepts in the UK, such as Express stores and Clubcard rewards scheme, in other countries.”

The US experiment has not been so successful, but then the company was unlucky. After all, it did set up in the US just as the largest economy in the world fell into its worst recession since the 1930s. And actually, given the awful timing, Tesco has managed the US pretty well.

But markets want the company to be more focused, more UK centric, to hone in on its home territory.

And then we wonder why UK companies so rarely grow to become global heavyweights.

Other articles in this series

The mystery of business

Google slams tyranny of quarterly earnings 

Nothing lasts forever 

Tesco’s woe 

© Investment & Business News 2013