Tesco will overtake international rivals Metro and Ahold to take third position in the global grocery retail league by 2010, according to a new report from IGD.
If its growth continues at an annual rate of 9.6%, Tesco’s global sales will mushroom from £30.8bn today to £58.9bn by 2010, when the UK will account for 71% of global sales, Asia 17%, and the rest of Europe 12%, says IGD.
And Russia, Indonesia, Vietnam and Romania are probably next on its shopping list over the next six to 10 years.
International sales should top £17bn by 2010, with China, Turkey and Japan likely to drive Tesco’s long-term international growth, predicts the report.
Tesco is focusing on developing global relationships with 20 key suppliers and has identified a premiership of 10 suppliers with whom it will work with very closely over the next 12 months, says the report.
However, Tesco is not necessarily interested in developing global deals or promotions, but developing international frameworks with key multinational suppliers, but continuing to negotiate activities locally.
Contrary to Tesco’s expectations, the enlargement of the European Union and falling duty rates has not led to a drop in prices in Central Europe, claims the report.
“Tesco’s experience is that suppliers and distributors have absorbed duty rate savings. One explanation for this move is that it is a defensive measure to prevent increased parallel trading by western European retailers in Central Europe.”
Tesco’s growing global scale had also prompted suppliers to restructure their teams, adds the report.
“To facilitate a cross divisional and cross market approach, suppliers are adapting their structure s internally in order to provide Tesco with fewer points of contact within the supplier organisation.”
The most widely developed new roles are that of global account manager and regional account manager, adds the report.
Separarately, Tesco is also ramping up its central distribution activities in international markets, with new fresh food central facilities expected to open in Haman in south Korea and Prague in the Czech Republic in 2005.
If its growth continues at an annual rate of 9.6%, Tesco’s global sales will mushroom from £30.8bn today to £58.9bn by 2010, when the UK will account for 71% of global sales, Asia 17%, and the rest of Europe 12%, says IGD.
And Russia, Indonesia, Vietnam and Romania are probably next on its shopping list over the next six to 10 years.
International sales should top £17bn by 2010, with China, Turkey and Japan likely to drive Tesco’s long-term international growth, predicts the report.
Tesco is focusing on developing global relationships with 20 key suppliers and has identified a premiership of 10 suppliers with whom it will work with very closely over the next 12 months, says the report.
However, Tesco is not necessarily interested in developing global deals or promotions, but developing international frameworks with key multinational suppliers, but continuing to negotiate activities locally.
Contrary to Tesco’s expectations, the enlargement of the European Union and falling duty rates has not led to a drop in prices in Central Europe, claims the report.
“Tesco’s experience is that suppliers and distributors have absorbed duty rate savings. One explanation for this move is that it is a defensive measure to prevent increased parallel trading by western European retailers in Central Europe.”
Tesco’s growing global scale had also prompted suppliers to restructure their teams, adds the report.
“To facilitate a cross divisional and cross market approach, suppliers are adapting their structure s internally in order to provide Tesco with fewer points of contact within the supplier organisation.”
The most widely developed new roles are that of global account manager and regional account manager, adds the report.
Separarately, Tesco is also ramping up its central distribution activities in international markets, with new fresh food central facilities expected to open in Haman in south Korea and Prague in the Czech Republic in 2005.
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