Tesco planning venture in India

[Ram]

UK supermarket giant Tesco has announced plans to branch out into the Indian market. Tesco plans to invest an initial £60m ($115m) to open a wholesale cash-and-carry business based in Mumbai. The group has also signed a deal to help the retail arm of India's Tata group, Trent, develop its hypermarket business, for a fee. Tesco said the "exciting" development would complement its existing businesses in China and the US. Chief executive Sir Terry Leahy added the move would give the group "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," he said. Tesco's expansion into India follows similar moves by US-based rival Wal-Mart alongside India's Bharti Enterprises. Legal limits Large overseas retailers are currently barred by law at the retail level in India, and are limited to either wholesale, licence or franchise arrangements. Should the legislation change, Tesco said it would look to open its own consumer retail business using the experience gained from its wholesale venture and deal with Tata. Under the deal with Tata retail arm Trent, the Indian firm hopes to increase the number of Star Bazaar hypermarkets it runs from four to more than 50 in the next five years. Tesco's new wholesale operation will also supply the Star Bazaar stores. Tesco currently operates 3,729 stores employing more than 440,000 people in 13 countries across the globe, including Hungary, Slovakia , Malaysia and Thailand. Tesco plans to invest an initial £60m ($115m) to open a wholesale cash-and-carry business based in Mumbai. The group has also signed a deal to help the retail arm of India's Tata group, Trent, develop its hypermarket business, for a fee. Tesco said the "exciting" development would complement its existing businesses in China and the US. Chief executive Sir Terry Leahy added the move would give the group "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," he said. Tesco's expansion into India follows similar moves by US-based rival Wal-Mart alongside India's Bharti Enterprises. Legal limits Large overseas retailers are currently barred by law at the retail level in India, and are limited to either wholesale, licence or franchise arrangements. Should the legislation change, Tesco said it would look to open its own consumer retail business using the experience gained from its wholesale venture and deal with Tata. Under the deal with Tata retail arm Trent, the Indian firm hopes to increase the number of Star Bazaar hypermarkets it runs from four to more than 50 in the next five years. Tesco's new wholesale operation will also supply the Star Bazaar stores. Tesco currently operates 3,729 stores employing more than 440,000 people in 13 countries across the globe, including Hungary, Slovakia , Malaysia and Thailand. Tesco plans to invest an initial £60m ($115m) to open a wholesale cash-and-carry business based in Mumbai. The group has also signed a deal to help the retail arm of India's Tata group, Trent, develop its hypermarket business, for a fee. Tesco said the "exciting" development would complement its existing businesses in China and the US. Chief executive Sir Terry Leahy added the move would give the group "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," he said. Tesco's expansion into India follows similar moves by US-based rival Wal-Mart alongside India's Bharti Enterprises. Legal limits Large overseas retailers are currently barred by law at the retail level in India, and are limited to either wholesale, licence or franchise arrangements. Should the legislation change, Tesco said it would look to open its own consumer retail business using the experience gained from its wholesale venture and deal with Tata. Under the deal with Tata retail arm Trent, the Indian firm hopes to increase the number of Star Bazaar hypermarkets it runs from four to more than 50 in the next five years. Tesco's new wholesale operation will also supply the Star Bazaar stores. Tesco currently operates 3,729 stores employing more than 440,000 people in 13 countries across the globe, including Hungary, Slovakia , Malaysia and Thailand. http://newsvote.bbc.co.uk/2/hi/business/7555530.stm ------------------ Here we go again. The same old issue of foreign supermarket giants, wanting to get a foothold in the Indian market.

[Sachinism]

Tesco are dangerous, they'll rid of all small local businesses

[Holysmoke]

I read "TISCO planning venture in India".. and I was like huh????

[sandtest]

Tesco are dangerous' date=' they'll rid of all small local businesses[/quote'] They are already declining at least in big cities. Well, I am not sure how big and qualitatively superior this "Tesco" is in west, But if they invest through 100% Indian Franchise and later after success list in Indian stock market, I don't have a problem. There are already supermarkets in Mumbai, departmental stores of Big Bazar, Hypercity, Le Marche etc. are full of crowd with lucrative offers. Those traditional "Kirana" Stores (Groceries) are feeling pinch due to loss of devoted customers. An apple marked "Washington" "Gala" sticker on it is sold at 10 Rs. less price than you get from roadside "Thela" ferrywala in Mumbai.....so it is bound to succeed. :--D Also second tier cities like Patna, Lucknow, Benaras, Allahabad, Kanpur etc.and I am sure many cities in South India will have good potentials in future to accommodate new giant super markets if India sustains it growth rate of 7.5% plus.