After negotiations with many Indian corporates, Tesco, the United Kingdom's largest retailer, today announced its that it is going solo into the cash-and-cary sector in the country, with an initial investment of 60 million pounds (Nearly Rs 485 crore) in the next two years.
Tesco is also entering into an exclusive franchise agreement with Trent, the retailing arm of the Tatas. Under the terms of the agreement, Trent will get retail expertise and technical help from Tesco for its hypermarkets Star Bazaar, for which it will pay fees. Trent Currently has four hypermarkets, with plans to grow to 50 stores over the next five years.
Tesco said that the new wholesale outlets would be designed for the Indian market following local research. They would offer a comprehensive range of great value fresh food, grocery and non-food products to small retailers, restaurants, kirana stores and other business owners. The ventures will be based in Mumbai.
Tesco’s wholesale business will supply merchandise to Star Bazaar, enabling the two companies to benefit from the rapid development of a modern supply chain.
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, providing IT, financial and business services to the entire Tesco Group.
Sir Terry Leahy, CEO of Tesco PLC, said: “This is another exciting development for Tesco. It complements our entries into China and the United States, giving us access to another of the most important economies in the world. Our wholesale cash-and-carry format will bring improved value, range and service to thousands of Indian businesses.
“We are delighted to be working with Tata, one of India’s largest and most respected business groups. Our agreement will enable us to share our international retail expertise, supporting Trent in the development of their Star Bazaar hypermarket business and benefiting Indian consumers.”
Noel N. Tata, MD of Trent Ltd, said: ‘“We are extremely excited about our association with Tesco. Our ability to access Tesco’s retail knowledge and expertise will play an important role in our endeavour to offer a unique shopping experience to customers across the country. Their wholesale cash-and-carry business will provide us with the opportunity to tap into a world class supply chain thereby delivering the best of products and services to our customers.”
