Asia is Tesco's 'engine for growth'

22nd Nov 2010 11:22

International operations make up almost a third of sales at Tesco and that could increase further as the UK supermarket aims to quadruple revenue in China to £4bn over the next five years.Overseas markets now account for 31% of total sales and 22% of profits, up from 10% and 5% respectively just a decade ago, the company says.Senior management, banging the drum out in the Far East at the moment, told investors and analysts it wanted to increase the number of hypermarkets in China from 82 to over 200."China offers an unrivalled opportunity in a large, rapidly growing market," Tesco said. "The prize is enormous, but the challenge is complex - China is vast, with cities the size of small countries."Business has been "strong" in Asia in the first nine weeks of the firm's second half to 31 October, with like for like sales up 8.3% in China, 6.7% in South Korea - up from 6% and 0.6% the previous two quarters, 3.4% in Thailand and 0.5% in Malaysia. Sales fell 5.7% in Japan.Asia and Europe director Philip Clarke, due to replace Sir Terry Leahy as chief executive in March, said the overseas business is an "increasingly important engine for growth".Its first cash and carry store in India, where it runs Star Bazaar shops with Trent, should open in May next year. Like for like sales in India jumped 18.3% in the four weeks to the end of October.But there's still plenty of work to be done and an American business to sort out. The Fresh & Easy grocery chain is losing money and far from the success it was supposed to be.A third quarter update will be released on 7 December.