Tesco expands with Indian market move

Published on Tuesday 12 August 2008 10:23

SUPERMARKET giants Tesco is to continue its global expansion after today revealing plans to move into the Indian market.

The firm is to invest 60 million over the next two years in setting up a wholesale cash-and-carry business in India.

The new wholesale outlets will be designed for the Indian market, offering a range of fresh food, grocery and non-food products to small retailers, restaurants, kirana stores and other businesses

It will also provide farmers and other suppliers with a route to market from its base in Mumbai.

Sir Terry Leahy, Tesco's chief executive, said: "This is another exciting development for Tesco. It complements our entries into China and the United States, giving us access to another of the most important economies in the world.

"Our wholesale cash-and-carry format will bring improved value, range and service to thousands of Indian businesses."

Tesco is also entering into an exclusive franchise agreement with Trent, the retail arm of the Tata Group.

Under the terms of the agreement, Tesco will receive a fee in exchange for retail expertise and technical capability to support the development of Trent's hypermarket business Star Bazaar.

Trent currently has four hypermarkets, with plans to grow to 50 stores over the next five years. Tesco's wholesale business will supply merchandise to Star Bazaar.

"We are delighted to be working with Tata, one of India's largest and most respected business groups," said Mr Leahy.

Tesco already sources over 170 million worth of Indian products each year, with sourcing offices in Delhi, Bangalore and Tirupur. It also employs nearly 3,000 Indian staff at its Hindustan Service centre in Bangalore, providing IT, financial and business services to the entire Tesco Group.

The Indian launch follows Tesco's expansion into the US last October with its consumer-facing Fresh & Easy stores.

It already operates across Europe, in the Czech Republic, Hungary. Ireland, Poland, Slovakia and Turkey, while the group has 814 stores across Asia, in China, Japan, Malaysia, South Korea and Thailand.