What Are You Prepared to Do?
In the movie “The Untouchables,” a stylish take on the battle between Eliot Ness and Al Capone in prohibition-era Chicago, Sean Connery’s character repeatedly asks Ness (played by Kevin Costner) what he is prepared to do. “He puts one of yours in the hospital, you put one of his in the morgue.”
The movie centers on Treasury Agent Ness’s commitment to rid Chicago of illegal booze, and most of all, Al Capone. By the end of the film, with Capone in prison, Ness claims to have violated everything sacred to him in order to achieve his goal.
Last week Tesco Chief Executive Philip Clarke told the L.A. Times that “It’s likely, but not certain, that our presence in America will come to an end.” That statement is an indicator of the overall tone of Tesco’s presence here in the U.S. While Clarke’s statement doesn’t come right out and say they are leaving, it effectively put a stake in the heart of the effort.
This wasn’t really a surprise to anyone; two months ago Tesco talked about the future of Fresh & Easy, saying the final decision would come at the April 2013 stakeholders meeting. And watching the lackluster performance of the chain since its arrival here in 2007 has been painful, even from the outside.
Since this rather wishy-washy announcement, the pundits have been weighing in with various theories about what led to Tesco’s demise. Some of the more popular excuses: they don’t understand the U.S. market; they picked one of the toughest markets to start in; local retailers were ready and waiting to respond.
I think Tesco’s failure here can be summed up in one word: commitment. Actually the lack of it. There’s an old joke about a ham & egg breakfast, and the difference between involvement and commitment. The chicken is involved, but the pig is committed. Tesco clearly wasn’t committed.
Launching a new chain takes boatloads of commitment, no matter who you are or where you’re launching. It also takes money, attention and clear goals. While Tesco claims to have lost over £850 million ($1.37 billion) on the venture, that was over a five-year period in which they constantly changed plans and withheld investment that was needed at critical times to help drive expansion and gain market share.
The retail food industry is in the midst of a change unlike any we’ve seen. The adoption of technology, which is changing almost daily, has impacted everything about the shopping trip. The shift of control from Boomers to Millennials is going on right now. And the need for big ideas like “big data” and how it will affect retail marketing will take buckets of money and lots of commitment from retailers who want to be in business five years from now.
After five years, it’s clear that Tesco not only brought a knife to a gunfight, but they didn’t see this as a fight for their lives. They are pulling up stakes and heading home. For retailers here in the U.S. this is a fight for survival. It’s time to ask yourself this question, “What are you prepared to do?”