LOS ANGELES – The soon-to-open Tesco locations in Southern California and Arizona has generated plenty of interest among retailers, and Forbes.com writer Mike Griswold offers the following advice on how businesses can combat the arrival of the grocery store chain (or any new competitor, for that matter):

1. Love your customers. “Understanding what your customers buy from you is important – as important as knowing what they buy from your competitors. Syndicated data can help determine what percentage of purchases you are capturing versus others. Loyalty programs are also a good way to gather granular customer data as well as provide incentives for customers to remain loyal,” wrote Griswold.

2. Protect your key assets, i.e., store managers. “To a large degree, the success of a retailer is determined by the competency of the store and district managers. These front-line resources, tasked with delivering flawless execution and exceptional customer service, will be heavily recruited by Tesco,” he observed.

3. Address your range and assortment. “With 5 percent of products typically reflecting 85 percent of sales, most retailers are overdue for a thorough review of their assortment. Now is the time to do it,” he said.

4. Location, location, location. “One of Tesco's core competencies is selecting and securing retail estate at prime locations. Its land bank (a collection of secured but undeveloped sites) in the U.K. is a significant strategic advantage. You can be sure that it is relentlessly combing target markets in the United States. The lesson: get your real estate now,” Griswold wrote.

5. Assess your operating model and its economics. “Tesco's legendary lean supply chain is a fact, and now one of the main areas of survival will be to drive the same operational efficiencies in your extended enterprise. Identify and develop an operational excellence model that will help differentiate. Ensure the model covers a holistic view of your organization and covers end-to-end processes. Develop meaningful key performance indicators, and ensure not only robust reporting on performance but nimble processes for reacting to business demands.”

6. Rethink the unthinkable. “Tesco's entry into the U.S. will change the retailing paradigm by providing the look and feel of a full service grocery store in a compressed footprint. It is time to think outside the box and create new and innovative ways to service the customer,” he noted.

7. Wrap-up. “Many, if not all, of these are good business-as-usual strategies. The impetus Tesco brings is to take a deeper, harder look at worldwide best practices in and outside retail. Make no mistake: retailers taking a Neville Chamberlain approach do so at their own peril.”