London: Tesco, the world’s number three retailer, has announced plans to develop a wholesale cash-and-carry business in India, alongside a deal with India’s Tata Group to help develop Tata’s hypermarket business.
The British supermarket group said on Tuesday it would make an initial investment of up to 60 million pounds ($115 million) in the cash-and-carry business over the first two years.
The expansion in the latest in a series by Britain’s biggest retailer, which agreed to buy 36 stores in South Korea for $1.9 billion in May and unveiled plans last month for a big push into banking.
“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,” Chief Executive Terry Leahy said in a statement.
Tesco said that under the terms of the agreement with Trent, the retail arm of the Tata Group, the Indian firm will be able to draw on Tesco’s extensive retail expertise and technical capability to support the development of its hypermarket business, Star Bazaar.
Trent currently has four hypermarkets, with plans to grow to 50 stores over the next five years
“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,” Leahy said.
Tesco shares have outperformed the DJ Stoxx European retail index by 5% this year. They closed at 394.1 pence on Monday, valuing the business at about 30 billion pounds.