Tesco kicks off Big PC Push

ANYONE remember Supermarket Sweep? Not the one from the US that started in 1965 but the UK version from the last decade? OK, that's settled, no one does. In a nutshell, it was a hokey morning game show fronted by an irradiated host, held in a supermarket where housewives answered questions about products and pricing to earn time on the clock for the all important "Wild in the Aisles" bit. That saw contestants flaking around the supermarket, stuffing their trolleys full of grub etc. and the one with the highest value trolley won. The totals often reached as much as a few hundred quid since you could only take up to five of any one item. Before I'm accused of being a secret sweep groupie, I looked this up on the Net. I swear.

Today, that show wouldn't last a week before going bankrupt. For instance, if the show was held in Tesco, or Tesco Extra, my game plan would be simple: five laptops, five PCs, five printers, five Playstation games, five DVDs and players, five camcorders, five PSPs, five MP3 players, a couple of LCD TVs and five bottles of champers to celebrate. The supermarket has become the hypermarket and last week Tesco, once again, dropped a bomb into the already squeezed PC arena.

Not content with offering a few end-of-line PCs and laptops, the supermarket has decided it wants a bigger chunk of the pie. And why not? To that end, Tesco will be introducing dedicated computing sections in its stores for the first time. The move sees it hop instantly from being an intermittent flogger of one-off bulk shipments into a regular, PC supplier of many different brands targeting numerous customer segments.

Kicking off in more than 50 Tesco Extra stores, the company will be supplying as many as 20 laptops and PCs from manufacturers including Acer, Samsung, Toshiba, Gateway and eMachines. So will it all be end-of-line tat? Apparently not. The company is promising £400 entry-level Acer Travelmate notebooks and will also be selling something to rival Dell's sub-£300 desktop. There will also be midrange and high-end offerings from Samsung, with dual-core systems starting at £600 and ‘new technology' notebooks for £800. Good news for consumers, at least on the superficial price tag surface.

However, if I were a small PC builder I'd be kicking a cat right now. If I was the regional manager of some large, unnamed chain of electrical retail outlets, I'd be acting like Dilbert's boss and drinking the last of the coffee and firing someone for nothing. The big difference is that Tesco has moved beyond the toe-in-the-water stage. It's figured that people do like laptops with their cream cheese and toilet rolls. As a result, it's going to bring massive buying power pressure to bear on its suppliers for long-term supply contacts. This is going to be especially evident in the first few months as it establishes the new operations. Prices will certainly match, if not beat those you will see in the usual electrical outlets. It's also going to be flogging over 25 printers in 150 stores and there's also a big push happening on the peripherals and accessories front.

The irony is that Tesco, the fourth biggest online retailer in the UK after Amazon, Dell and Argos, is moving to create a bigger retail presence while retailer Dixons and its gang are doing the opposite. The Dixons Stores Group (DSG) is already taking a beating from etailers, shutting down outlets and trying to move much of what it does online. With Tesco pulling out all the stops, this could further the erode the death-grip that DSG has had on the electrical retail space. In itself, not a bad thing since I like competition in a greedy, ‘what will it mean for my wallet' kind of way. Other supermarkets are sure to follow and for punters, prices will drop. The downside of course is that the staff in these places will exude the usual bare-minimum amount of knowledge and grunt and scratch whenever stumped by a moderately challenging query. As for the quality of support, we'll have to wait and see.

Is the supermarket the new Dixons? Very possibly. After all, we are slaves to our bellies. We might not need to pop into Currys every few days but at least once a week we do our own version of the supermarket sweep. And, when the missus isn't looking, and a dual-core laptop just happens to slip into the trolley under the nappies and frozen pizzas, then so be it. µ