Tesco enters India with cash-and-carry

Tesco, the world's number three retailer, said it plans to set up shop in India with a wholesale cash-and-carry business and will help Indian conglomerate Tata Group to grow its hypermarket business.





The long-awaited move into the world's second most populous country is the latest expansion by the British supermarket group, which last year opened stores in the United States and last month made a big push into banking.



It follows a similar step by US rival Wal-Mart, which has teamed up with India's Bharti Enterprises, as the world's top store groups seek a foothold in India's $350bn (£184m) retail industry, amid forecasts it could double in size by 2015.



Foreign multi-brand retailers are currently limited to wholesale or licence and franchise arrangements in India.



Tesco International and IT Director Philip Clarke told reporters the firm was keen to set up its own retail business in India, should the legislation change.



"If and when it changes, our wholesale business and the agreement with the Tata Group gives us great experience of the Indian marketplace and consumer," he said on a conference call.











Tesco said it would make an initial investment of up to £60m in the cash-and-carry business over the first two years.



It plans to open its first outlet in Mumbai towards the end of next year, with further distribution hubs in Delhi and Bangalore that will support a network of smaller cash-and-carry stores supplying thousands of small retailers and restaurants.



Under the deal with Tata Group's retail arm Trent, Tesco will, for a fee, provide its retail expertise and technical capability to support the development of its hypermarket business, Star Bazaar.



Trent currently has four hypermarkets, with plans to grow to 50 stores over the next five years. The stores will be supplied by Tesco's cash-and-carry business.



Trent shares jumped more than 18 per cent in a weak Mumbai market, and at 0745 GMT were up 13.9 per cent at 565 rupees. Tesco shares, which have outperformed the DJ Stoxx European retail index by 5 per cent this year, were steady at 393.9 pence, giving a market value of about £30bn.









Tesco's Clarke denied that Britain's biggest retailer was over-stretching itself with its expansion plans, saying the move into India had been carefully thought out with teams researching in the country for the past three years.



India has long been viewed as a potential gold mine for international store groups as living standards rise and the middle class grows.



Less than than 5 per cent of the industry is currently in the hands of large, modern retailers, with protests by traders and concerns about job losses slowing the expansion of even large local groups such as Reliance Retail, a unit of India's most valuable firm Reliance Industries.



Tesco will compete with the cash-and-carry operations of Germany's Metro AG and Shoprite Holdings, as well as Wal-Mart's venture with Bharti. France's Carrefour has also said it plans to enter the wholesale market.



Britain's Marks & Spencer in April formed a venture with Reliance Retail for stores to sell clothes and homeware.



Trent also runs department stores, bookstores, and manages Benetton Group's Sisley stores in India.



The Tata Group's interests span chemicals, hotels, telecoms and tea. It also owns two of Britain's best-known businesses, steelmaker Corus and Jaguar and Land Rover cars.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Attenborough with the primates
tvWhy BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
News
Campbell: ‘Sometimes you have to be economical with the truth’
newsFormer spin doctor says MPs should study tactics of leading sports figures like José Mourinho
Sport
football
Life and Style
Agretti is often compared to its relative, samphire, though is closer in taste to spinach
food + drink
News
Kelly Osbourne will play a flight attendant in Sharknado 2
people
News
Down-to-earth: Winstone isn't one for considering his 'legacy'
people
News
The dress can be seen in different colours
i100
Sport
Wes Brown is sent-off
football
Voices
Lance Corporal Joshua Leakey VC
voicesBeware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Life and Style
Alexander McQueen's AW 2009/10 collection during Paris Fashion Week
fashionMeet the collaborators who helped create the late designer’s notorious spectacles
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003
Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

Our woman in Beijing builds a new relationship

Britain's first female ambassador to China intends to forge strong links with growing economic power
Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

Courage is rare. True humility is even rarer

Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Alexander McQueen: The catwalk was a stage for the designer's astonishing and troubling vision

Alexander McQueen's astonishing vision

Ahead of a major retrospective, Alexander Fury talks to the collaborators who helped create the late designer's notorious spectacle
New BBC series savours half a century of food in Britain, from Vesta curries to nouvelle cuisine

Dinner through the decades

A new BBC series challenged Brandon Robshaw and his family to eat their way from the 1950s to the 1990s
Philippa Perry interview: The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course

Philippa Perry interview

The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course
Bill Granger recipes: Our chef recreates the exoticism of the Indonesian stir-fry

Bill Granger's Indonesian stir-fry recipes

Our chef was inspired by the south-east Asian cuisine he encountered as a teenager
Chelsea vs Tottenham: Harry Kane was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope

Harry Kane interview

The striker was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope
The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?
HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?