International

Since the mid-90s, we have been investing in new markets overseas, seeking out new opportunities for growth and ways of generating long term returns for shareholders. Today the Group operates in 13 markets outside the UK, in Europe, Asia and North America. We also announced our entry into the Indian market last year, where we are establishing a cash & carry business. Over 180,000 employees work in our international businesses, serving in 2,026 stores and generating £17.9 billion sales and over £700 million profit. Over half of our selling space is now outside the UK.

Our International Strategy

The full emergence of international retailing is not something that will happen overnight - it requires a long term approach.

With more than ten years of experience overseas, Tesco has evolved a strategy based on six elements:

1. Be flexible - each market is unique and requires a different approach.
   In Japan, customers like to shop for small amounts of extremely fresh food, every day. Existing hypermarket formats don't meet the needs of local customers, so Tesco's entry into the Japanese market was through the acquisition of a discount supermarket operator.
2. Act local - local customers, local cultures, local supply chains and local regulations require a tailored offer delivered by local staff.
   In Thailand, customers are used to shopping at traditional wet markets, interacting with vendors and rummaging through piles of produce to choose what they want. Rather than adopting the Western approach of neatly packaged, convenient portions, our Rama IV store in Bangkok tries to meet local customers' expectations.
3. Maintain focus - we understand that customers want great service, great choice and great value. To become established as the leading local brand is a long term effort and is not about planting flags in map.
4. Use multi-formats - no single format can reach the whole of the market. A whole spectrum from convenience to hypermarkets is essential and you need to take a discounter approach throughout.
   Our experience of trading a mix of stores means we can now move to multi-format quicker and we have recently opened Express stores in Hungary and the Czech Republic.
5. Develop capability - it's not about scale, it's about skill - so we make sure we have capability through people, processes and systems.
   We believe that investing in our people is the right way to live our values and brings sound business benefits, too. Developing individuals at every level means that we have home-grown managers who understand our culture and can effectively develop our business.
6. Build brands - brands enable the building of important lasting relationships with customers.
   In China, our first Tesco branded store called Tesco Legou opened in February 2007 and we have now completed re-branding of all stores.