Tesco has revealed plans to quadruple its sales in China to GBP4bn (US$6.41bn) over the next five years.
The retailer plans to double the number of hypermarkets it has in China to over 200, which it said is similar to the number of Extra stores it runs in the UK, while tripling the number of customers per week to around 12m.
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Tesco announced yesterday (21 November) that it plans to improve its profitability in China through investing in centralised distribution, private label, direct sourcing and using customer data from Dunnhumby insight.
Tesco’s comments came as part of an investor summit focusing on the UK retailer’s operations in Asia.
In South Korea, Tesco is aiming to grow its selling space at a 9% compound annual rate to 1.46m square metres by 2013/14. Tesco is looking to open food-focused superstores and a smaller Express Mini format, as well as considering convenience stores, “value” stores and electronics shops.
The company is forecasting 50% annual compound sales growth to over GBP200m by 2013/14, while working to become a multi-channel online player in South Korea.
The plans came as Tesco revealed its international operations are becoming increasingly important to the business. The retailer said 31% of annual sales and 22% of annual profits were coming from its international operations, against 10% and 5%, respectively, ten years ago.
Tesco also issued a sales update from its operations in the region. The group said like-for-like sales in South Korea, its biggest market outside the UK, were up 6.7% in the nine weeks to 31 October, up from 6% in the second quarter.
Like-for-like sales in China were up 8.3% over the same period, a slight drop on the 9.3% like-for-like growth reported in the second quarter of the year. Meanwhile, in Malaysia, like-for-like sales were up 0.5%, posting its first positive growth after a series of consecutive declines.
In Japan, like-for-like sales were down 5.7% so far in the third quarter, following a 5.4% decline in the second quarter. However, Tesco did announce that reformatted stores were reporting a 20% increase in sales.
Like-for-like sales were up 3.4% in Thailand and rose by 18.3% in India through its franchise partnership with Star Bazaar.
