As we have analyzed Tesco’s operation in America, we have often commented on the arrogance that seems to be holding back Tesco from reaching its potential in the USA.
Part of that started with a “dissing” of American suppliers by bringing several of its British suppliers to help set up and supply its new Fresh & Easy division in the USA.
Among the things they do is these transplants function as de facto procurement agents for Fresh & Easy. Because they hold the power of the purchase order, the individuals who procure for these organizations are very powerful people.
Recently a bunch of leading vendors held an industry dinner at an industry event — probably about 70 or 80 people total. Attending were a number of buyers, including one who worked for one of the Tesco transplants. The Pundit wasn’t there, but we’ve heard a number of nice things about the event.
The atmosphere was pleasant, the food was quite good and the wine, well they were serving Heitz Cabernet, which is from one of the oldest and most well established wineries in the Napa Valley.
Now here at the Pundit, we confess that on our trips to the Left Coast we’ve enjoyed a Heitz Cab or two in the company of industry friends, and we found it downright pleasant.
Apparently, however, the Pundit’s tastes are not as refined as those of this particular buyer from one of the Tesco transplants who was invited to attend that night.
This particular buyer decided to order his own wine, which he said he would pay for.
Now we confess that Momma Pundit taught us that when invited to an event, barring allergy or religious conviction, one eats and drinks what one is served. Then one says thank you. We would think it insulting, no matter who was paying, to tell our hosts that their taste in wine was poor or that their generosity was lacking.
Yet this buyer ended up ordering one $800 bottle of wine and five bottles at $350 each — or running up a $2,550 wine tab.
Guess what this buyer then did? When the tab came, he set it down on the table and announced that he wasn’t paying for it after all, and left the event.
The suppliers paid his bill… we would guess begrudgingly, since Tesco gives out so little business anyway. But we’ve heard the story from enough people to know that many were aghast at the behavior of this fellow who would be nothing in the business if Tesco didn’t make him important.
We could go on about adding costs to the system and the inappropriateness of it all, but we see it as a kind of arrogance and simple disrespect that won’t bode well for success in this business.
Yet Tesco is so insular, it just isn’t hearing what is really going on. Businesses pay a big price for being tone-deaf.
