Tesco is starting to flex its muscles in the Hungarian fuel retailing market with the opening of a second discount petrol station. Building on its existing reputation as a food retailer in the market and its fuel retailing success in the UK, it's certainly strong enough to make its mark.

Hungarian retail chain Tesco Global Rt, a subsidiary of UK retailer Tesco, has opened its second petrol station at a site in Veszprem, western Hungary. This follows the launch of the country's first ever combined supermarket and petrol station at a 24 hour Tesco Megapark in March of this year. Motorists using the new Tesco petrol stations can purchase discounted fuel daily from 6am to midnight, paying 5 Hungarian forints (€0.02) less than at other major filling stations.

These aren't the first cases of petrol stations on Tesco sites in Hungary. The retail chain, KlubPetrol, opened a pilot station outside of a Tesco store in 2002. However, following the success of the independent forecourt concept in the UK, Tesco decided to go it alone. To date, it looks as though it is making successful strategy decisions in the Hungarian market.

Tesco Global reported an increase in 2003 sales of 26% over the previous year. With 34 convenience stores and 27 supermarkets equating to a 13% share, the company is now a market leader in the food retailing segment. Prompted by this success, competition is already looming in the shape of French supermarket chain Auchan. Auchan is looking to match Tesco's sales growth in the country, and is looking at following Tesco's example by opening its own petrol stations.

Over 2004, Tesco is expected to complement experiments with smaller convenience store formats with the opening of more discount petrol stations next to both new and existing stores. The plan is to open eight new petrol stations, with the third expected at Gyor. However, with a licence to build a petrol station at all of its 61 existing stores already in place, Tesco certainly has the scope to expand more rapidly if, as seems likely, the concept proves successful.

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