Tesco to expand in Chinese market

Source: Global Times

Tesco, the world's third-biggest retailer by sales, plans to expand its retail and leisure shops in China in the next five years.

According to the plan, by 2010, the retailer will open 80 shopping centers in China, with an area reaching 40 million square feet (3.7 million square meters). Hypermarkets will make up one-fifth of the total area, and other retailers making up the rest.

This plan exceeds the amount of retail area Tesco has in the UK, as in its 80-year history, it has 33 million square feet there.

The firm stated that it would invest 2 billion euros (18.35 billion yuan) in China in the next five years.

"The greatest surprise from Tesco's results was the pace and magnitude of its development plans in China," said Clive Black, analyst at Shore Capital.

Currently, the firm is competing for market share in the Chinese market, as it is still not in the top five so far, according to data from Planet Retail.

Terry Leahy, CEO of the Tesco, described the Asian market as the "major engine of growth of the group."

In 2009, Tesco’s sales revenue increased 6 percent to reach 57 billion euros and pre-tax profits up 9 percent to 3.2 billion euros.

While its revenues in central Europe, except for Poland, saw drops last year. Its revenues in eastern European also saw a 4 percent decline in profits. The Asian market is seen as having a good performance, as its sales revenues grew 20 percent and the profits up 24 percent year-on-year.

Source article: http://business.globaltimes.cn/industries/2010-04/524617.html