Tesco has put in a bid for more than 60 stores in Thailand, Malaysia and Singapore, currently owned by its French rival Carrefour, as part of its strategy to conquer Asia and cement its position as a global force in supermarket retailing.
The French hypermarket group put the stores on the market after a strategic decision to pull out of Asian countries where it stood no chance of becoming market leader. Tesco is already the market leader in Thailand and Malaysia, and more than a third of its shopfloor space is in Asia.
The Cheshunt-based retail group has operated in Asia for more than a decade. It has more than 1,230 shops in Asia and expects to open another 270 by February 2011. It views the region as "a significant long-term opportunity" even though its like-for-like sales in Thailand, Malaysia and Japan went into reverse last year as a result of the economic downturn and local political problems in Thailand.
Tesco has particularly ambitious plans for China, where it intends to open 80 vast shopping malls in the country by 2016. Earlier this year chief executive Sir Terry Leahy said: "We have continued to invest through the downturn to ensure that we will be in an even stronger position as the economies recover."
The deadline for first bids for the Carrefour stores closed Tesco is understood to be among about 10 groups to have tabled initial bids. Others include the Japanese Aeon group, Dairy Farm of Singapore and the French Casino group.
The stores are expected to fetch about $1bn (£647m) and Carrefour may decide to sell them piecemeal, if single-store or country sales will achieve a better price.
The portfolio consists of 40 supermarkets in Thailand, 19 in Malaysia and two in Singapore.
Tesco currently has 571 stores in Thailand, including 110 hypermarkets, and 29 shops in Malaysia, of which 28 are hypermarkets. It plans to open another 50 outlets in the two countries by March 2011. It currently has no presence in Singapore.
One supermarket executive said Tesco would undoubtedly be keen to snap up the Carrefour chain: "Only a few portfolios like this come along and only a few retailers have the wherewithal to consider it. They would be mad not to run a tape measure over it."
Two years ago Tesco paid $1.9bn for 36 Homever stores in South Korea, which it bought from E-Land, which had bought them from Carrefour for a similar price two years earlier. At the time, they were making a loss but the rebranded Homeplus shops are now trading profitably, with double-digit like-for-like sales. Korea is now Tesco's largest international business; in April, Tesco said sales there were £4.5bn and profits were almost £300m.
Five years ago Tesco did a store swap with Carrefour, handing the French group six Tesco stores in Taiwan in return for 11 Carrefour outlets in the Czech Republic.
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