Analysts seem to think that Tesco’s core UK business, which had been lagging competitors, is back on track so it’s understandable that the cavalcade should move on to focus on overseas.

Tesco has been at the heart of two fascinating, if speculative, stories this week.

First the giant grocer was reported to have been considering drawing upon the expertise of former PM Tony Blair for advice about expanding in the Middle East - one of the few places on the globe where it doesn’t run shops at present. Blair of course is very popular in the region.

More convincingly, analysts at ING proposed that Tesco should snap up Dutch group Ahold, which has extensive operations in the US but is seen as undervalued, to establish a significant Stateside business rather than relaying on expanding its Fresh & Easy chain organically.

Analysts seem to think that Tesco’s core UK business, which had been lagging competitors, is back on track so it’s understandable that the cavalcade should move on to focus on overseas.

But like the UK, some of Tesco’s international stores were hit during the downturn. Last month’s interims showed a strong performance in Asia, but trading profit was down in Europe and the US made a loss.

Having taken the plunge and launched in the US, there’s a case to be made for a deal with Ahold, even though the latter is mainly on the East Coast and Tesco on the West. A takeover could add as much as 20% to Tesco’s 2011 earnings if all went well, ING reckons.

Critics of Tesco’s US venture fear that unless loss-making Fresh & Easy is ramped up and finds its feet quickly it could end up as a millstone around the group’s neck a few years down the line.

Such concerns about one of Tesco’s existing international markets indicate it has issues to address before opening in new markets such as the Middle East - especially when at home it is pushing into new sectors such as financial services in a bigger way.

Whatever Tesco decides to do, speculation that Colonel Gaddafi may advise on US options is understood to be wide of the mark.