Tesco and the gardening market
Tesco’s business decisions tend to be informed by a monitoring of consumer trends, and their latest acquisition (of the gardening centre chain Dobbies) is in line with this.
The reasons, according to news reports:
- chasing the “green pound” which it sees as expanding
- an ageing population
- the growing population
Tesco Chief Exec Terry Leahy expanded on the first point, being quoted in the Independent as saying that they see an attitudinal link, that gardening products are “the way they [consumers] express their desire to be green. By offering products such as water butts, composting kits and organic fertilisers, garden centres can meet this increasing demand. They can also provide a route into other carbon-efficient products such as home insulation, domestic wind power, solar panels and ground source heat pumps”.But in terms of trends, perhaps the most significant sign is that while they will be expaning the Dobbies chain, they won’t rebrand it as Tesc, and they don’t plan to sell Tesco ‘own-label’ products in it. Which may be further evidence for those who see Tesco as being close to the limit of their power in the UK.
Even a city analyst (David McCarthy at Citigroup) seemed to concur with this view:
“Arguably the most significant aspect of this is the decision to retain the Dobbies brand. We do not think this is just about Dobbies having a strong name. It could be political, ie avoiding concern on the Tescofication of the UK.”