Major retailer enters the US and Gartmore Global Focus Fund

Earlier this month, Tesco, the world’s third-largest retailer, made its long-awaited US debut. The UK’s most successful retailer opened its ‘Fresh & Easy Neighborhood Market’ in the small city of Hemet, before launching a further five stores in Los Angeles. Investors can now focus on the US debut, with the impact of the publication of the ‘Groceries Market Provisional Findings’ by the UK Competition Commission having proved somewhat positive for Tesco, according to Neil Rogan, Head of Global Equities and manager of the Gartmore Global Focus Fund and the Gartmore SICAV Global Focus Fund. Neil commented that, “’Tesco has also demonstrated continued international success, in particular, in the emerging markets, while the UK consumer has shown remarkable resilience in the face of the summer’s events, notably the Northern Rock crisis.” Both the OEIC and SICAV Global Focus Fund established holdings in Tesco at the start of the month.

Preliminary findings by the Competition Commission proved to be relatively lenient, dispelling fears that Tesco with a 30% market share among the ‘big four’ would be hit hardest, according to Neil. The Competition Commission found that “Tesco is not in such a strong position that other retailers cannot compete.” The report continued, “Expansion by other grocery retailers continues, which suggests that Tesco’s purchasing cost advantage, share of national grocery sales or expansion into convenience store retailing is not acting as barrier to expansion by other grocery retailers.” The only slight negative might be the requirement on the ‘big four’ to offload some of their land banks where competition is seen to be weak but this will only be known in six months’ time.

Neil has managed the Gartmore Global Focus Fund since its 2001 launch. An Associate Member of the UK Society of Investment Professionals, Neil is rated AAA by Citywire. The Gartmore SICAV Global Focus Fund, which has a AAA rating from Standard & Poor’s, recently marked its three-year anniversary.