Tesco international boss Philip Clarke has vowed that its operation in China will be profitable in his tenure as chief executive as he outlines the “terrific” growth prospects in Asia.
Speaking to Retail Week, Clarke said: “80 years in the UK has got us a long way and there are still growth prospects here but it involves broadening the brand into other products and services. We’ve been in Asia 13 years and there are terrific growth prospects. We can open a huge number of stores for a very long time in China.”
He added: “China is one of the most important markets for us. There are stores that are making profit and if we withdrew all the investment we would make money now but we’re building a business for the long term. It will be profitable in my tenure.”
Clarke also revealed that Tesco’s trial franchise operation in South Korea could be rolled out to other markets. It opened its first franchise store in Seoul in February and now operates 18 franchise Homeplus Express shops.
Clarke said: “We have an obligation to the communities we serve, as some feel threatened when modern retail moves in and traditional mom and pop stores close. The reality is somewhat different though as local retailers tend to reinvent themselves when competitors open but operating franchises is helping them find another opportunity.”
Clarke said he would “struggle to think of places it wouldn’t work” and said it would roll out to other places.
He also said he would continue to spend time in the international markets once he takes over as chief executive in March. He currently spends around 180 nights outside of the UK and post March will spend between 85-100 days in international markets. He said: “I’m not running it from Cheshunt, as a CEO I need to be sure we’re meeting the needs of customers and looking after staff.”
He also said he would give incoming UK chief executive Richard Brasher space to run the UK. “He doesn’t want me clodhopping around, I’ve got to give him some space,” he said.