Tesco targets Vietnam in new global expansion
Wednesday 12 January 2011
Tesco is looking to launch in Vietnam in a move that would extend the grocery giant's global empire to 15 countries.
Such a rollout would underline the world's third largest retailer's relentless push to grow its international business. This is expected to be a key area of focus for Philip Clarke, Tesco's chief executive designate, who is stepping up from his current role as international and IT director when Sir Terry Leahy retires in March.
The grocer has already reshuffled its management structure to form a new UK board before Mr Clarke, a Tesco lifer, takes the helm.
The company is understood to be looking to enter two new countries, although an announcement about launching in a new territory is not thought to be imminent.
However, Tesco flagged up the attractiveness of South-east Asia at a recent event for City analysts, which it took to see its businesses in China and South Korea back in November. At the time, Tesco noted the relatively undeveloped grocery markets of Vietnam, the Philippines and Indonesia, as well as their storming economic growth and huge populations.
Tesco, which is already the market leader in Thailand and Malaysia, was thwarted at the end of last year in its efforts to buy stores in Malaysia, Thailand and Singapore from the French giant Carrefour.
Vietnam has a population of 87 million and, according to Tesco's presentation, a "modern grocery distribution" market worth just £4bn at present. The country's economy grew by 8 per cent in 2009 and its income per capita was expected to surpass $1,000 in 2010. Regarding Vietnam, a Tesco spokesman said yesterday: "We never comment on rumour and speculation."
Tesco is set to update the City on its Christmas trading on Thursday. Analysts at Deutsche Bank expect it to deliver flat UK like-for-like sales growth, a modest slowdown from the 0.7 per cent uplift in the third quarter.
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