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Tesco to power ahead overseas
Archived article dated Monday June 9th 2008
Over the past 10 years the focus for Tesco has been on bricks and mortar but over the next decade it is likely that the internet will play a bigger role in its business with the Tesco home shopping service made available in major cities around the world.
by Glynn Davis
Speaking at the IGD Global Retailing conference in London Philip Clarke, international and IT director at Tesco, stated that it is “inevitable” that people in cities such as Bratislava and Shanghai will be able to access online shopping from Tesco.He can also foresee the time when shoppers use their phones to scan barcodes of products that are then sent direct to Tesco as a shopping order. “We've done a lot of preparatory work and the technology is ready but you have to make sure the market is also ready,” says Clarke.
This will be done in tandem with the company's continued expansion overseas, with its international division now as big (with £701 million of profits) as the whole of Tesco was in 1998.
He pointed to the US as a great opportunity despite many people already regarding its Fresh & Easy stores as a failure. He says the stores should be judged over 10 years rather than only 10 weeks and he remains confident of their long-term success because it is a unique concept.
Clarke suggests the temporary break in the roll-out of the stores is giving its kitchens, which make the chain's private label produce, and supply chain some time to “catch up” and that some “fine tuning and tweaking” is also now taking place.
In addition to the US, China is another key target market for Tesco. Clarke believes it will be the battleground of the future, with the heavyweight supermarkets Tesco, Wal-Mart and Carrefour each looking to build substantial businesses in the China.
Despite the strong competition Clarke is confident of Tesco's position as he believes it will be able to use the experience its has gained from operating around the world to better 'localise' its food offer than its rivals who are both currently working hard to better tailor their ranges to the local market.
Like the competition Clarke has also identified India as a major opportunity but has yet to open any stores there as Tesco has found it tough to find a suitable partner. “It would be irresponsible not to be in India. We've been researching and hope to be their soon. We are trying to find the right partner but the courting takes a long time,” he explains
But unlike some other major grocers Tesco is not intending to set up shop in Russia for the foreseeable future as Clarke says it has enough on its plate elsewhere around the world. It is the lack of resources available in terms of high quality people that he says is the “major limiting factor” for Tesco in growing its international business
Tagged as: glynn davis | idg | tesco
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