The problems mount up for new Tesco CEO, Phil Clarke, and one of the biggest issues on his desk is how to deal with the under-performing US business, Fresh & Easy, which announced further losses and store closures this week.

In particular, I am struck with the shift in Tesco’s approach to new concept development and how the success the company had with Tesco Express, where it trialled and tested a series of prototypes over 5 or 6 years before finding and rolling out a winning formula, seems to have evaporated with Fresh & Easy. The company seems to have forgotten its approach of testing, learning and refining a small number of stores before building scale. With Fresh & Easy management have done exactly the opposite; they have built up a chain of 300 stores and then started to properly develop the offer.

Testing and improving a series of individual prototypes is a far easier and cheaper way of delivering a successful new offering than the approach Tesco has adopted in the US. At first it might appear to be a slower route to success, but, as with the tortoise and the hare, in business it’s not how you start the race that counts, but how you finish it

© Stuart Cross 2012.