Category Archives: Tesco China

Tesco Stumbles With Wal-Mart as China Shoppers Buy Local

Source: Bloomberg News

Tesco Plc (TSCO) this week is trying to lure Chinese shoppers with promotions on soy sauce, cooking oil and apples. Emily Zhang still won’t do much of her shopping there. Continue reading

Tesco closes stores as expansion stutters

Source: By Tang Zhihao and Wang Zhuoqiong (China Daily)

British retail giant Tesco Plc, the world’s third-largest retailer by sales revenue, confirmed it would close four stores in China, a move to concentrate on its key business regions in the country.
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Foreign retailers feel the pinch of rapid expansion

Source: By Li Woke (China Daily)

The buzz of fast expansion in China comes with a hefty price tag for foreign retail giants.
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Market watching plans of Tesco China’s new lineup

Source: Want China Times

Tesco PLC, the top retailer in Britain and the world’s third-largest retail chain, has set grand plans for business expansion in the pivotal Chinese market alongside other multinational retailers.
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Tesco takes online orders for food

Source: By Tang Zhihao in Shanghai (China Daily)

Buoyed by an increase in demand from the e-commerce industry, the British retail giant Tesco Plc said it plans to experiment with allowing Chinese customers to go online to order food.

Lucy Neville-Rolfe, executive director of Tesco, said Shanghai will be the first city where Tesco will introduce online grocery shopping in China.

Neville-Rolfe did not specify when the company will begin to let Chinese customers order food online, only saying the change will come as soon as possible.

In late 2011, Tesco worked with Taobao.com, the largest Chinese online shopping platform, to offer general merchandise for babies and young mothers.

Its new online plans target people who go on weekly shopping trips.

“With general merchandise, we did cooperate with Taobao as a trial,” Neville-Rolfe said. “I was actually talking about home shopping for food, which is a rather different thing. What we are doing is getting food delivered to homes. We are a world-leading business on that.”

As Tesco pursues its e-commerce business plans, it might not consider working with an independent online business operator.

“The normal thing would be better using your brand website because it would be linked to your retail business,” Neville-Rolfe said.

Figures from the research company Analysys International suggested that online trading operations had 806 billion yuan ($127.9 billion) in sales revenue in 2011, up 55 percent from 2010.

Retailers with physical stores have been paying more attention to online shopping in recent years as they try to gain a stronger position in their industry.

The US-based retail giant Wal-Mart is looking to acquire a controlling interest in Yihaodian.com, a Chinese online store.

In addition, Carrefour SA, a France-based retail giant, and CP Lotus Super Center, a subsidiary company of the Thailand-based Charoen Pokphand Group (CP Group), have also developed online shopping systems.

“The longer-term vision over the Internet is it is an exciting opportunity for us,” Neville-Rolfe said. “It is the next-stage development for retail, particular for general merchandise. We are trying to give a strategic thought for that.”

Peng Jianzhen, deputy secretary-general of the China Chain Store and Franchise Association, said the development of online shopping has become essential for large retailers in recent years, largely because younger shoppers prefer it.

Tesco, to better support its development in China, opened a distribution center in Jiashan, Zhejiang province, last year.

In addition to its plans for online shopping, Tesco intends to open 16 new stores in China this year. Neville-Rolfe did not say where those stores will be located.

To protect the environment, Tesco’s plans call for building the stores in a way that prevents them from using large amounts of energy, Neville-Rolfe said.

She attended the 2nd Retail Sustainable Development Forum in Suzhou, Jiangsu province, on Thursday.

In other news this week, Xinhua reported that Tesco will open 16 energy-efficient stores in China in 2012, according to a senior company official.

Lucy Neville-Rolfe, executive director of Tesco, made the remarks in an interview with reporters before attending a forum on sustainable development in retail businesses in Shanghai.

She said Tesco has opened 110 outlets and 14 small convenience stores so far in China. Since 2008 all newly-opened and renovated outlets have reached the target of reducing energy consumption by 25 percent, the same target intended for the company’s new stores in China.

The company has made efforts to adopt energy-saving storage and logistics technology, as well as expand its local purchasing chain, Neville-Rolfe said, adding that it plans to introduce online grocery shopping for local residents in Shanghai.

Tesco Signs Collective Labor Contract With Employees In China

Source: China Retail News

British retail giant Tesco has signed its first collective labor contract with employees in China.

The contract reportedly covers Tesco’s 30,000 employees in 109 supermarkets, 14 convenience stores, and six logistic centers in China.

According to the collective contract, Tesco will establish a collective wage consultation system. Based on the increase of China’s consumer price index, the profit conditions of the company, and the wage level of the entire industry, Tesco will discuss the salary increase rate with the labor union in February every year. The retailer will also sign a wage-related special agreement to ensure that the employees can share the development benefits of the company.

In addition, the collective contract states that employees who work for the company for five years and above will sign open-ended contracts. All employees will sign labor contracts and no ancillary labor will be used. The company offers seven rewards to employees in China, including free work-time meals; annual per capita holiday gifts of CNY250; quarterly per capita team building funds of CNY80; more paid leaves; physical and exams; and additional medical insurance.

Supermarkets in China to see major changes in 2012

Source: Want China Times

A new round of changes is likely to be seen in the Chinese supermarket industry this year after unprecedented upheavals in 2011, fueled by the outbreak of controversial issues including price fraud, management reorganization, and falsely labeled products.

In 2011, four major retailers — Carrefour, Wal-Mart, Tesco and Metro — all saw top-level management changes in their China operations. Beijing Business Today, a newspaper, reported that industry insiders believe the management reshuffles mirror changes in the four enterprises’ stance toward the Chinese market. New managers will face stiff competition from domestic rivals and rapidly increasing costs.

Price fraud at supermarkets triggered a chain reaction last year; on Jan. 26, the National Development and Reform Commission publicized “forged original prices” and other irregular practices at many major retailers. Despite penalties handed out by the commission, price fraud still persists, including the posting of two sets of prices, falsified price tags and false discounts.

Another change will affect the way retailers deal with farmers. The Ministry of Commerce has asked municipal regulators to assist with the direct supply by farmers to major supermarkets to cut down on costs and enable consumers to buy products at lower prices.