| Videos | Channels | Search |
Shopping for profit, Tesco strikes China deal
After 9 years in China, Tesco is to cut its exposure in the country by merging its operations with Vanguard, part of state controlled China Resources Enterprises.
Under the proposed agreement, Tesco will take a 20 percent stake in the enlarged business, but will also have to pay Vanguard hundreds of millions of pounds.
In a statement, Tesco said the deal would "bring together CRE's deep understanding of local customers, established nationwide infrastructure and proven track record as a partner with Tesco's global retail expertise, international sourcing scale and supply chain capabilities."
It’s not just China where Tesco is facing challenges. Last year it suffered its first drop in annual profits for two decades; it’s battling against poorer sales in its main market Britain; has decided in the past year to shut its failed US division Fresh & Easy and to exit from Japan.
By reigning in its international expansion, CEO Philip Clarke is putting more focus on improving Tesco in the UK. On Friday it unveiled its first new Extra supermarket, part of the company’s GBP1 billion drive to modernize its stores.
The store includes a Giraffe restaurant, a Harris + Hoole Coffee shop, a Euphorium bakery and an F&F clothing store.
01:24 minutes
Tags: agreement, britain, bryan roberts, china, china resources enterprise, consumers, cre, equities, expansion, expertise, food, global, growth, high street, infrastructure, international sourcing, james doxford, merger, partner, philip clarke, retail, sara walker, saxo bank, saxo tv, supermarket, supermarkets, tesco, tesco expansion, tesco overseas, tesco stores, tradingfloor.com, tsco, tsco ln, uk, vanguard, video