Tesco has indicated that the company’s future growth will be driven by international expansion.
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The UK retailer operates in 12 markets outside the UK, countries that account for almost 50% of its sales.
Speaking at IGD’s global retail conference in London today (4 June), Philip Clarke, Tesco’s international & IT director, highlighted the importance of overseas markets to the company’s future development.
In Europe, Clarke said Tesco had established itself and is now focusing on expanding into different formats to drive sales.
“The message from Europe is a strong performance in hypermarkets has been established and we are now moving into different channels,” Clarke said.
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By GlobalDataIn Asia, Clarke said Tesco’s biggest challenge was to take advantage of the “fantastic opportunity” offered by China. “If you wanted to say where the battleground between Wal-Mart, Carrefour and ourselves is: it is China,” Clarke said. “We have all said China is a strategically important market.”
Turning his attention to Tesco’s Fresh & Easy unit in the US, Clarke was keen to dispel reports that the business was proving unsuccessful. “It’s only been six months. I’m sure you have read that our business is already a failure. We disagree. Sales are growing and more and more customers are shopping at Fresh and Easy.”
Tesco operates 67 stores in the US and plans are in place to open an additional 160 outlets.
Clarke said that Fresh & Easy has received positive customer feedback and highlighted the importance of private label as a means to differentiate itself from the competition. “The quality of private label is second to none: it is like nothing else you see in the US.”
Wal-Mart’s is rumoured to be mulling plans to launch its own small-format stores in the US. Clarke likened the move to Tesco’s decision to open hypermarkets in the UK when the US retail giant purchased Asda.
“It’s exactly what I’d do. We think we have something unique and they must find something to compete with us,” he said.
Meanwhile, Tesco also hopes to enter India in the near-term, but finding the “right” partner is taking time, Clarke said. “Like any relationship courting takes a long time if you are going to have a long marriage.”
