In cut-throat retail the rule is that if your competitor opens up a store on the northeast corner of an intersection, you open a store on the southwest corner. It works for McDonald's and Burger King. It didn't work for Revco and CVS. CVS bought Revco in 1997. How is will play out for Walmart and Tesco will be interesting. From The Financial Times:
Wal-Mart is planning to open its new small-format Marketside grocery stores around San Diego in southern California as well as in Arizona, expanding its efforts to catch up with the rapid expansion of Tesco's US Fresh & Easy chain. The largest US retailer has applied for a liquor licence for a small Marketside store that is planned as part of a retail development in Oceanside, a coastal city north of San Diego. The location, still awaiting planning approval, will be just two miles from a recently opened Tesco Fresh & Easy store in the neighbouring city of Vista. Planning documents, first reported in the local North County Times newspaper, show drawings of the proposed store with the logo prominently displayed. Wal-Mart has also leased a 12,000 sq ft space in a new condominium development in downtown San Diego, in a rapidly gentrifying area adjacent to the city's baseball stadium.
What I find interesting is that Walmart is the company playing catch-up here. For decades the retailer had the American rural retail landscape as its own. Only in recent years has it attempted to crack urban markets and the attempt to create a vertical presence in markets is also new for Walmart. Walmart and San Diego do not have a friendly history and the use of Marketside stores could be a change in tactics or a Walmart stalking-horse. Jeff Hess: Have Coffee Will Write.

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