SUPERMARKET Tesco plans to quadruple sales in its Chinese business over the next five years, the firm said yesterday.
Tesco told investors and analysts it hopes to hit £4bn in annual sales by 2015, in a country where sales are currently rising at eight per cent year-on-year.
The firm aims to build more than 1,000 Chinese hyper- and supermarkets by February 2015, to bring its total number of stores to 3,800 in an attempt to compete with grocers such as Wal-Mart and Carrefour with a more established presence in the region.
It aims to almost triple the number of Chinese customers shopping at Tesco per week to around 12m, which represents around four per cent of the urban population in the firm’s target regions. In the UK, around 15m people, or 25 per cent of the population, use Tesco loyalty cards regularly.
“Tesco has spent six years learning about the local market and developing a strategy for profitable growth,” said Tesco China chief executive Ken Towle in a presentation. “The path to long-term profitability is now clear – leveraging our substantial up-front investment as we grow our scale.”
Tesco will focus on the most affluent regions of China, in particular in the country’s growing number of cities with more than 1m residents. The firm has already had success with stores in shopping malls in mid-sized cities.
The firm is eyeing further expansion in Asia following its success in Thailand under the Lotus brand, which is now the most popular grocer in the country.