May 15, 2008 | posted by Michael Baxter in High Steet |

In the land of the supermarkets, opportunity still reigns.  Both Tesco and Sainsbury’s made announcements yesterday to make you forget all the woe.

For Tesco, the big news is another move into Asia, this time South Korea.    In fact the retailer has been in Korea for nine years now, and apparently its Tesco Homeplus is the second largest chain of discount stores in the country. 

Now it has forked out just shy of £1bn and has bought 36 new discount stores from E-Land. 

Tesco’s plans in the US are, by all accounts, below target at the moment.  Its Fresh’n Easy experiment was always going to be a bold move, and any kind of retail venture in the US in 2008 was always going to struggle.  Then again, in times of hardship cheap quality food can do well.  Tesco’s US venture is struggling because US consumers are used to old fashioned service in their convenience stores.  But in times like these, price matters, and that where Tesco scores. 

As for South Korea, Terry Leahy, the boss of the company which says “every little helps,” reckons the country’s grocery market is worth £50bn annually, so there is plenty of room in the tank for more expansion.

By contrast, Sainsbury’s big announcement was a local affair.

You may recall, not so long ago, its then new boss, Justin King, announced a three year plan to turn the company around.  Well, would you believe it, that was three years ago now.

Sales were up 5.8 per cent to £19.2bn in the year to 22 March, while pre-tax profits came in at £479m from £477m last year. Okay, that is not exactly a runaway success, but considering the economic environment, it wasn’t bad.

Mr King also brought back memories of Mao Tse-tung.  The former Chinese premier once said that “a journey of 1,000 miles begins with a single step.”  Well yesterday, in response to the question, is Sainsbury’s great again– something which was initially stated as the aim of that three-year plan, Mr King said, “Greatness is a journey, not a destination. We are much better than we were three years ago.”

Mind you, impressive while the recovery at Sainsbury’s has been – up to a point, at the outset we were told it would regain the number two spot in the supermarket lead. Even Asda admitted this was likely, yet the latest data shows Asda’s lead has barely been affected at all.

For right now the number two supermarket is still “Asda priced.”