TESCO LOOKS AT GROWTH IN EAST

TESCO is looking at the $1billion (£650million) sale of supermarket stores in the Far East by French retail giant Carrefour.

Sources in the Far East said Britain’s largest supermarket group was among a number of large foreign retailers interested in the 61 stores across Singapore, Malaysia and Thailand as they jockey for position in some of the world’s fastest-growing economies.Other bidders are said to include private equity groups and local operators. Tesco’s rivals are thought to include France’s Casino Guichard Perrachon and Japan’s second-biggest retail group Aeon, as well as local players Dairy Farm.

Tesco is keen to expand in Asia, highlighting the region has providing a “significant long-term growth opportunity”. It has continued to invest in its businesses there throughout the downturn. The supermarket group has already embarked on an aggressive expansion programme in Thailand, opening 92 stores there last year, and is looking to grow its Malaysian business by 27 per cent this year. It is the market leader in both countries where consumer spending has jumped on their strong growth.

A Tesco spokesman said the company “did not comment on market rumours or speculation”.
Carrefour is looking to sell the stores as part of a move away from those countries where it had little chance of becoming market leader and into those where it could be. It has put an $800million to $1billion price tag on the stores. Some analysts said with such strong interest, Carrefour has a good chance of reaching the upper level of its price range.

Some of the bids are thought to include all the stores, while others are for those in individual countries. However, Tesco is thought to be bidding for all the stores.

Carrefour will retain a significant business in China and will keep stores in Indonesia and Taiwan. Asia is responsible for around 8 per cent of its sales.