Page last updated at 02:11 GMT, Saturday, 20 December 2008

When supermarket giants collide

By Giancarlo Rinaldi
South of Scotland reporter, BBC Scotland news website

Tesco and Sainsbury logos
Tesco appears to have won the store battle in Kelso

For those, like me, with an overactive imagination and a love of sporting analogies it has been Kelso's answer to Muhammad Ali versus George Foreman.

Supermarket heavyweights Tesco and Sainsbury's have been trading blows for a while in a "Rumble in the Borders".

It looks like the former has landed the knockout blow by emerging as preferred bidder for a site in the town.

However, don't be surprised if Sainsbury's struggles up from the canvas for one more shot at the title.

One intriguing question of this particular struggle has to be: "Why Kelso?".

With a population of about 6,500, the cobbled town is not obviously ripe with development potential.

Just like the people of the town we have been waiting a very long time to build this store and we look forward to bringing our development forward

Doug Wilson
Tesco corporate affairs manager

However, it currently lacks one of the major supermarket chains, making it a prized target.

Sainsbury's landed the first blow earlier this year when there were three potential sites in the town on the table.

It championed Pinnaclehill, Tesco was backing Spylaw Farm while Deanway Development proposed Station Road.

Scottish Borders Council gave its backing to the site supported by Sainsbury's.

The company was so pleased with the decision that it went ahead and lodged a planning application for Pinnaclehill despite not owning the land.

Crucial counterpunch

It now appears that may have been where Sainsbury's, in boxing parlance once again, let its guard down.

Tesco spotted the opportunity to land a crucial counterpunch.

It put in an offer to the council to buy Pinnaclehill and has now been declared the preferred bidder.

Tesco staff worldwide 440,000 (280,000 in UK)
Tesco stores worldwide 3,956 (2,184 in UK)
Sainsbury's staff 150,000
Sainsbury's stores 785
All information courtesy of company websites

The authority said it had based its decision on criteria including price, deliverability, environmental design and community contribution.

Nonetheless, it has left Sainsbury's head spinning, and the firm issued a joint statement with development firm CWP.

"CWP and Sainsbury's supermarkets are saddened and disappointed at the decision taken by SBC to tentatively accept a late bid by Tesco for their land at Pinnaclehill," Sainsbury's said.

Crucially, they say, the Tesco bid does not include provision for the extension of the Pinnaclehill Industrial Estate to allow businesses currently on the site to relocate.

"It is fundamentally clear that Tesco are not in a position to fully deliver on this issue," added the statement.

"Therefore, the current decision taken by SBC not to sell the Pinnaclehill land to Sainsbury's will ensure the local community continues to be disadvantaged in their quest to secure a major supermarket within Kelso."

They have vowed to fight on.

Return match?

Not surprisingly, the bidding decision has been given a warmer welcome in the opposite corner.

"Tesco is delighted to have received the news that SBC has chosen us to build a new supermarket in Kelso," said corporate affairs manager Doug Wilson.

"Just like the people of the town we have been waiting a very long time to build this store and we look forward to bringing our development forward.

"As you will see the decision the council has made was taken not just on price but on our ability to deliver an environmentally friendly store and our commitment to the community."

It looks like this particular bout has gone Tesco's way, then.

But don't rule out a return match coming soon to a town near you.

Print Sponsor

Town store fight enters new phase
27 Nov 08 |  South of Scotland
Sainsbury's steps up store plans
21 Nov 08 |  South of Scotland
Triple supermarket fight decided
12 May 08 |  South of Scotland
Supermarket struggle verdict due
13 Mar 08 |  South of Scotland
Sainsbury's plans Borders store
04 Mar 08 |  South of Scotland
Tesco agrees football ground deal
15 Feb 08 |  South of Scotland

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific