Tesco is to launch a wholesale cash-and-carry business in India and has signed a deal with conglomerate Tata to develop its hypermarket business.
The grocer will pump up to£60 million into the wholesale business in the first two years and will base its operations in Mumbai initially.
The wholesale outlets will be designed for the Indian market following local research. They will offer a range of fresh food, grocery and non-food products to small retailers, restaurants, mom-and-pop stores and other business owners.
Tesco is also entering into an exclusive franchise agreement with Trent, the retail arm of Tata Group, which will gain support from the UK giant for its hypermarket business, Star Bazaar.
Tesco’s new wholesale outlets will also supply Star Bazaar, which Trent hopes to expand from four outlets at present to 50 over the next five years.
Tesco chief executive Sir Terry Leahy said: “This is another exciting development for Tesco. It complements our entries into China and the US, giving us access to another of the most important economies in the world. Our wholesale cash-and-carry format will bring improved value, range and service to thousands of Indian businesses.
“We are delighted to be working with Tata, one of India’s largest and most respected business groups. Our agreement will enable us to share our international retail expertise, supporting Trent in the development of their Star Bazaar hypermarket business and benefiting Indian consumers.”
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