Tesco is looking to divert the bulk of its capital investment over the next 12 months to China, the UK retail giant’s chief executive said today (6 October).
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Sir Terry Leahy earmarked China as a market set for investment when he outlined Tesco’s internatiuonal plans at the retailer’s interim results presentation in London.
“At the moment, we’re looking at GBP500m (US$796.4m) [of investment] over the next year in China,” Sir Terry said.
Tesco has 66 stores in China and last week secured a lease on a store in Dongying – one of the country’s so-called “third-tier” cities.
The company is also trialling its Express format in the north-east of the country and said today that it is looking to open 19 hypermarkets in China this year.
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By GlobalDataTesco is competing with the likes of Wal-Mart and Carrefour in China, as well as domestic chains including Wumart Stores.
Last week, reports in France said that Carrefour‘s largest investors – Colony Capital and Bernard Arnault – were placing the French retailer’s management under pressure to sell-off its operations in emerging markets like China.
However, Tesco finance director Laurie McIlwee talked up his company’s investment plans for China, including in the country’s “tier-three cities”.
“China defines these cities as tier-three but they’ve actually got populations over 1m people,” McIlwee said.
