'Retail destinations’ to drive Tesco sales



The success of Tesco’s business in Asia is set to help shape the company’s strategy in Britain as the group looks to develop its supermarkets into family retail destinations.

The company’s two biggest international businesses are in South Korea and Thailand, where Tesco (Other OTC: TSCDY - news) hypermarkets are often situated within shopping centres. In the UK, Tesco is now looking to develop its supermarkets into such retail destinations to drive footfall. It has bought family restaurant chain Giraffe and opened Harris + Hoole coffee shops and Euphorium bakeries within its stores.

Trevor Masters, Tesco’s Asia chief executive, said the company’s business in South Korea and Thailand gives the UK “valuable experience to learn from”.

Tesco is the largest supermarket chain in Thailand. It has more than 1,400 stores and is planning to open another 350 this year. However, the company is also the second largest shopping centre developer in the country. Twenty-two of its centres have been spun off into a separate listed property fund.

“Creating retail destinations is something we have been doing for some time in Asia and we have learned a lot about creating a compelling offer for local customers,” Mr Masters said. “In the UK we are working on creating retail destinations and Asia gives us valuable experience to learn from. Every market is different and one size won’t fit all but it means we have insight which may help to guide our thinking in other markets.”

Tesco will officially launch an online food business in Bangkok this week and plans to launch in Shanghai later this year.

“One of the strengths of having an international business is that the innovation works both ways. Grocery delivery was developed in the UK and we can use that model in all our markets,” Mr Masters added.