9th Feb 2006 07:02
Tesco PLC09 February 2006 TESCO PLC TESCO TO ENTER UNITED STATES Tesco PLC today announces that it intends to enter the United States through thedevelopment of a new convenience format, beginning on the West Coast in 2007. The development of the business will be through organic growth, with initialplanned capital expenditure of up to £250 million per year, which will be fundedfrom existing resources, with break-even expected by the end of the second fullyear of operation. Tim Mason, currently our Marketing and Property Director,will move to the US to run the business, remaining on the PLC Board. The new format is designed for the American market, following extensive consumerresearch and modelled on Tesco's highly successful and innovative Expressconcept, which we now operate in five countries, with over 800 stores servingaround eight million customers every week. International growth forms a key element of Tesco's four part strategy and thebusiness currently trades in 12 countries outside the UK, mainly in Asia andCentral Europe. Over half of Tesco's selling space is now outside the UK.Today's announcement represents a strategic move into another developed market,complementing our entry into the emerging Chinese market in July 2004. It willallow us to build our position in the world's largest markets, and brings thepopulation of markets we operate in to 2.1 billion people, contributing over 55%of global GDP. Tesco Chief Executive, Sir Terry Leahy, commented: "This is a tremendously exciting move for Tesco which will add a new leg to ourinternational expansion. The United States is the largest economy in the worldwith strong forecast growth and a sophisticated retail market. It is a market wehave researched extensively for many years and over the last year we havecommitted serious resources to developing a format that we believe will bereally popular with American consumers. "We've put a strong team together, led by Tim Mason and drawing on the wealth ofskills and experience within the group. The first stores will open on the WestCoast in 2007." CONTACTS: Press: Lucy Neville-Rolfe +44 1992 646 606 Jonathan Church +44 1992 646 606 Maitland +44 20 7379 5151 Investors / Analysts: Steve Webb +44 1992 644 800 NOTES FOR EDITORS ABOUT TESCO Tesco is the UK's largest retailer and one of the world's leading internationalretailers. We have reached this position through consistent focus on our fourpart strategy for growth: 1. We have a strong, growing core UK business offering customers excellent value, choice and convenience 2. We aim to be as strong in non-food as we are in food 3. We follow the customer into new areas - like retailing services such as financial products (Tesco Personal Finance), internet shopping (Tesco.com) and telecoms (Tesco telecom offers mobile, fixed line and broadband services). 4. We are a leading international retailer with a long term strategy for growth. The Tesco Group had turnover of £33,974 million ($59,454 million) with pre-taxprofits of £2,029 million ($3,551 million) in the year to February 2005. We have2,467 stores, employing over 370,000 people in the 13 countries in which weoperate. In Europe, outside the UK, we operate in Ireland, Hungary, Poland,Czech Republic, Slovakia and Turkey where we have 305 stores and over 61,000employees. In Asia we have 343 stores and over 40,000 employees across ourbusinesses in Thailand, S. Korea, Malaysia, Taiwan, Japan and China. We are themarket leader in six of the countries we trade in. Tesco is a multi-formatbusiness, operating hypermarkets, superstores, supermarkets and conveniencestores. ABOUT THE UNITED STATES The United States has a population of 296 million making it the third largestcountry in the world, after China and India. It is by far the largest economy inthe world, with GDP of $12,458 billion (£7,119 billion), representing 29.5% ofglobal GDP. Its economy has also seen strong growth, with GDP growing c.5% perannum between 2001-2005. This growth is expected to continue at c.6% per annumbetween 2005-2010. There are significant areas of population concentration inthe USA, with over 54% of the population living in the ten most populous statesand 32 cities with populations greater than 1.5 million. The United States grocery market is currently worth over $600 billion (£343billion) and is forecast to grow 40% over the next five years. Compared to theUK, there is a higher proliferation of retail formats, including traditionalformats such as supermarkets and newer formats such as supercenters, warehouseclubs and dollar stores. ABOUT TIM MASON Tim Mason, who is 48, is Marketing, e-commerce, Property and Republic of IrelandDirector of Tesco PLC. He joined Tesco in March 1982 and held a number ofmarketing and buying positions before becoming a Regional Retail OperationsDirector in 1989 and then Marketing Operations Director of Tesco Stores Ltd in1993. He was first appointed to the Board in 1995. Tim led the development ofour retailing services businesses and in addition to his current role, he isChairman of tesco.com and a non-executive Director of Tesco Personal Finance andTesco Mobile. He is also a non-executive director of GCap Media PLC. An exchange rate of £1 : $1.75 is used throughout this release. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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