Tesco

TITLE: DVD category director

LEADERSHIP: Tesco, the U.K.’s largest retailer with an estimated £1 spent on DVDs out of every £7 spent in its stores, has been leading Brit grocers’ invasion of the disc market since it first set its sights on the business.

Between 2005 and 2006, grocers nearly doubled their DVD market share in the biggest legal disc market outside the U.S., from 16% to 28.5%, according to research firm Screen Digest. Tesco’s share was 12%, putting it in the lead for the category.

Tesco has built its business offering the lowest prices, and it’s employed that strategy on DVDs, bringing in the top releases and offering them at discounts.

Tesco also has closely followed its customers’ lead, announcing earlier this year it would cut some of the shelf space it devotes to DVD, telling British trade Cue Entertainment that shoppers increasingly want to download.

Like global competitors Wal-Mart and Carrefour, Tesco is aggressively expanding around the world, opening stores in China, Eastern Europe, Russia and even the U.S.

It offers studios new opportunities to sell legit DVDs to consumers in markets now dominated by piracy.

POV: “Grocers understand low-margin business really well,” says Amy Heller of research firm Media ControlGfK. “They’ve been able to treat DVD like oranges and apples and Mars bars.”

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