Tesco (LSE: TSCO), based in England, is the world’s third largest retailer, with stores in 14 countries across Asia, Europe and North America. With market share of approximately 30%, it’s the clear grocery leader in the UK.

Tesco introduced Fresh & Easy Neighborhood (grocery) Markets to the Western U.S. in 2007, and there are already 168 stores in California, Arizona and Nevada. The stores are typically in the 15,000 SF range, making them much smaller than the average U.S. supermarket (and similar in overall philosophy to Aldi). Although the stores aren’t exactly turning profits for Tesco yet, it looks as though they’re here in the U.S. to stay.

And that’s why we should care. Tesco has the cash to buy an existing U.S. grocery operation and expand beyond it’s three-state footprint. With some big American grocery players struggling, the opportunity exists for Tesco to step in. Perhaps Safeway (Genuardi’s, Vons, Tom Thumb, Carrs, Randalls), which is California-based as Tesco’s U.S. operations are, is a prime suspect.

www.freshandeasy.com

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