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Tesco To Set Shop In India

Written By Views maker on August 14, 2008 | 8/14/2008

Britain's largest and world's No.3 retailer Tesco Plc, plans to set up shop in India with a wholesale cash-and-carry business and a deal to help Indian conglomerate Tata Group grow its hypermarket business. The tie-up with the Tata Group will allow Trent to source quality Tesco products for its Star Bazaar hypermarkets and to benefit from the British retailer's technical know-how and experience. The long-awaited move into the world's second most populous country is the latest expansion by Tesco as it looks for new profit streams beyond its dominance of the British grocery market. The group 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.
Tesco announced a 60 million pounds ($115 million) initial investment to develop a wholesale cash-and-carry business in India that will source directly from farmers and supply to a range of outlets from mom-and-pop stores to hypermarkets. The new wholesale outlets, wholly owned by Tesco, will offer a comprehensive range of fresh food, grocery and non-food products to small retailers, restaurants, owner-run general stores and other business owners.
Alongside, Tesco also announced a tie-up with Trent Ltd, the retail arm of the Tata group, to help develop the Indian company's Star Bazaar hypermarkets.Trent plans to more than double the number of stores it has now, to 100 by March 2010 even as it's mulling a foray into multi-brand outlets and food retailing. Trent currently operates retail stores `Westside', `Landmark' and hypermarket `Star Bazaar'.
Tesco is currently in 13 countries outside the UK, which account for over half of its total selling space. Last year it opened stores in the United States and last month it announced a big push into banking. It is learnt that, Tesco already sources over 170 million pounds worth of Indian products each year, with sourcing offices in Delhi, Bangalore and Tirupur. It also employs nearly 3,000 Indian staff at its Hindustan Service centre in Bangalore that provides information technology, financial and business services to the entire Tesco Group.