Tesco enters Indian Retail with

Tata Trent

Presented By:
Karishma Seth
PGDM07028
Introduction to Tesco 200px-Tescologo.svg.png

 Tesco Public ltd. Co. is a British-based international grocery

and general merchandising, retail chain.
 It was founded in 1919,in East London, by Jack Cohen.
 It has its headquarters at Cheshunt,England, UK.
 The largest British retailer by both global sales and domestic
market share with profits exceeding £2 billion.
 In 2008, the company overtook German retail giant Metro AG
to become the world's fourth largest retailer, the first
movement among the top five since 2003.
Continued….
 Its key people are David Reid (Chairman) and Sir Terry
Leahy (Chief Executive).
 Originally specialising in food and drink, it has diversified into
areas such as clothing, consumer electronics, consumer
180px-POL_Prokocim_Tesco.jpg

financial services, retailing and renting DVDs, CDs, music

downloads, Internet service, consumer telecoms, consumer
health insurance, consumer dental plans and software.
Introduction to Tata Group
 The Tata Group is one of India's oldest, largest and most
respected business conglomerates.
 Its name has been respected in India for 140 years for its
adherence to strong values and business ethics.
 The Group's businesses are spread over seven business
sectors.
 It comprises 96 companies, operates on six continents and
employs 350,000 people.
 Revenues in 2007-08 were $62.5 billion (around Rs251,543
crore), of which 61 per cent is from business outside India.
Continued………..
 The business operations of the Tata Group currently encompass seven
business sectors: communications and information technology,
engineering, materials, services, energy, consumer products and
chemicals.
 The Group’s major companies are beginning to be counted globally:
 Tata Steel became the sixth largest steel maker in the world after
it acquired Corus.
 Tata Motors is among the top five commercial vehicle manufacturers in
the world and has recently acquired Jaguar and Land Rover.
 TCS is a leading global software company, with delivery centers in the
US, UK, Hungary, Brazil, Uruguay and China, besides India.
 Tata Tea is the second largest branded tea company in the world,
through its UK-based subsidiary Tetley.
Continued…
 Tata Chemicals is the world’s second largest manufacturer of
soda ash.
 Tata Communications is one of the world’s largest wholesale
voice carriers.
Tesco entering India with Tata
 Tesco, the largest British retailer, is entering India through a
franchisee agreement with the Tatas.
 The Tata group company Trent is tying up with Tesco to
grow its hypermarket (discount stores) business.
 “Star Bazaar” is an established player in the hypermarket
business in the country having four stores located in
Ahmedabad, Bangalore and Mumbai (2 stores).
 “Star Bazaar” will get marketing as well as technological
support from Tesco.
 Trent will also source products for its hypermarket business
from Tesco’s proposed wholesale stores in India.
 Trent, which currently operates three hypermarket stores in
the country, plans to invest over Rs. 2,000 crore to open
another 50 stores in the next five years.
 Tesco plans to set up a wholesale cash-and-carry business
in India that will source directly from farmers and supply to a
range of outlets from mom-and-pop stores to hypermarkets.
 The wholesale outlets, which will be designed for the Indian
markets, will sell fresh food, grocery and non-food products
to small retailers.
 Tesco, which already employs 3,000 people at IT back-office
operations in Bangalore, plans to recruit local staff for the
wholesale store business very soon.
 It is a one stop shop offering a wide range of products
including fresh foods — fruits, vegetables and non-vegetarian
products, dairy, home care, health and beauty products,
apparel, home décor, gifts and household items.
Investments
 The company said it would make an initial investment of
up to $114 million (Rs 480 crore) in the cash-and-carry
business over the first two years.
Strategies
 “Star Bazaar” was recently transferred to a 100% Trent
subsidiary,Trent Retail for sharper management focus and
improvement in operations.
 This was done to beef up its large box format through local
sourcing arrangements as against national sourcing.
 This was done because as the Trent Retail was unviable,
especially in food and groceries, due to infrastructure
bottlenecks, tax inefficiencies and high freight costs.
 Another reason for hiving off Star Bazaar was that it could
have tie ups with international retailers to enhance its know-
how.
Continued…
 Apart from accessing the $99.5-billion Tesco’s
marketing,stock management, retail information
systems,cold-chain infrastructure and front-end services
expertise,Trent will source merchandise for Star Bazaar
from Tesco’s wholesale outlets in India.
Thank
You