Tesco branches out with joint venture in India

Britain’s largest retailer, Tesco, has announced its intention to open grocery stores in India.

The supermarket is planning to open wholesale grocery stores in India, that will supply goods to hypermarkets owned by Indian conglomerate Tata Group.

The supermarket giant is to invest £60 million over two years to help develop its wholesale business.

According to Tesco, the joint venture will allow it to complement its existing businesses in China and the US and will give them access to another of the most important economies in the world.

Tesco will also work with Trent, the retail arm owned by Tata Group, to develop its Star Bazaar hypermarkets.

Under the terms of the deal with Trent, Tesco will receive a fee for assisting with the expansion of Star Bazaar from its current 4 stores, to a proposed 50 hypermarkets over the course of the next 5 years.

The move into India follows that from US-based rival, Wal-Mart, who has teamed up with India’s Bharti Enterprises.

Furthermore, retailer Marks and Spencer entered into a joint venture with Reliance Retail of India earlier this year in the hope of establishing their brand in other countries.

Tesco operates 3,729 stores and has a workforce of over 440,000 in 13 countries worldwide. It is the biggest player in the British grocery market with a 30% share of the market. Asda controls 16.9% of the market, Sainsbury’s has 16.4% while Morrison’s is in fourth place with 11.5%.

Late last year, Tesco embarked on a major expansion of the west coast of America. It opened the first Fresh & Easy Neighbourhood Market in the city of Hemet which is about 75 miles east of Los Angeles.

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