British retail major Tesco remains optimistic about its partnership with the Tata Group firm Trent Ltd. to capitalise for growth opportunities in India despite uncertainty over FDI in multi-brand retail.
In his annual address to the shareholders, Tesco Chief Executive Philip Clarke said the company had entered into an agreement with Trent Ltd. to form a 50:50 joint venture with Trent Hypermarket Ltd. for developing presence in the Indian market.
“We firmly believe that our partnerships in both China and India will allow us to capitalise on these enormously exciting markets in a way which is disciplined in our use of capital and focused on profitable growth,” he added.
The British retail major Tesco and Trent Ltd. finalised their JV for multi-brand retail in March last, thus becoming the first foreign retailer to plan a foray into the segment.
Tesco Chairman Richard Broadbent said: “Many of our choices this year, to enter partnerships in China and India or to invest modestly in an internet start-up in South-East Asia, reflect this philosophy of establishing a position of opportunity and testing returns against our criteria as a basis for building long-term, value-enhancing positions.”
He further said: “The company continues to see opportunity to create value internationally by leveraging our skills and scale in relatively rapidly growing economies with less-developed modern retail sectors where the rate of economic growth, coupled with switching to modern retail outlets, could generate attractive returns. Our plan is clear and focused on our three priorities: a strong UK business, multichannel leadership, and disciplined international growth.”
Tesco had announced forming of an equal joint venture with Trent by picking up 50 per cent stake in Trent Hypermarket Ltd. (THL) for about 85 million pounds. THL operates the Star Bazaar retail business in India.
Meanwhile, Walmart India said it would “engage and work” with the new government and continue to focus on the cash and carry business in the country.
Walmart operates 20 wholesale stores under the brand ‘Best Price’ in India. “We’ll continue to remain engaged, committed and work together with the new government and other stakeholders and continue adding value to the economic growth in the country,” Walmart India CEO Krish Iyer said. “We’re committed to India and are pleased with our established and successful cash and carry business and anticipate substantial growth in this business.”
In April, Walmart announced that it planned to open 50 wholesale stores in the next four to five years to expand its footprint in the country. This was the first major announcement by the US retailer after it called off a six-year partnership with Bharti Enterprises in October last and decided to operate stores independently in India.
– PTI Economic Service