Tesco opened a new flag ship store in London, UK, close to where I lived, in Earl's Court. (This was a while ago, so I am sure they are better now. About 5 years ago.) This is in an area which has a number of competitors, all who had fine tuned what the store offered to the local market. The area has people with high income and a lot of (rich) immigrants, think Saudi, stock brokers etc.
The Tesco store's range of products was awful for the first 12 months. It was like they had drop-shipped a generic store, tuned for general suburbia, and then slowly tried to fine tune it. 50% of what they sold seemed to be the wrong stuff for the market.
They later opened a Tesco Express as well, just a couple of blocks away, and compared to the Marks and Spensers Food Only store down the street (which opened a year later) it was awful, really bad. I couldn't go in and actually buy anything I wanted there other than maybe milk. I have visited recently and the Tesco Express is still there, the same crappy collection of goods and hardly anyone seems to buy anything. Whereas the M&S is packed.
It could well be that the area, Kensington / Earls Court, has such a special set of clientele in it that the "standard" model of product provisioning for Tesco just doesn't cut it. But I could have easily come up with a better set of products to sell in there myself and I am just a customer not a retail specialist.
So I guess I am saying that I think there is plenty of scope for improvement.