Tesco pins hopes on Asia
British retailer Tesco hopes its Asian investments will help its global operations bounce back.
The challenging consumer environment in Europe has affected Tesco’s trading profit which dropped to 3.31 billion pounds (US$5.54 billion) in the year to February.
“Our performance in the (last) year was not where we had planned it to be,” Tesco said in its earnings statement.
“In the UK, we faced a weaker and increasingly competitive market in the second half,” said the group.
However, Tesco is optimistic about its future prospects as it increases its investments overseas.
“We have significantly reduced our new investment in Europe, focusing the majority of our overseas capital on targeted, high-returning investments in Korea, Malaysia and Thailand,” said CEO Philip Clarke.
It says Thailand, where it has around 1400 convenience stores, is one of its largest international markets.
Tesco has also signed a deal with China Resources Enterprises to combine the two companies’ operations in the Chinese market. The company says the JV will help it move quickly to profitability there.
In India, it has struck a deal with Tata Group to operate and develop the Star Bazaar and Star Daily store formats.