No sale threat to Tesco Thailand
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There seems little prospect of the Tesco Thailand business – trading as tesco Lotus – being sold or scaled back in the wake of the British JV partner’s sale of its South Korean Homeplus business last week.
Tesco PLC is under intense pressure to reduce debt and improve its trading profit, a goal which received a significant boost last week with the US$6 billion sale of the Homeplus business.
Tesco Lotus operates some 1400 stores in Thailand, 1100 of them Express outlets, essentially oversized convenience stores, the balance hypermarkets.
The company said in a statement that it has confidence in the Thai market’s growth prospects and planned to continue with expanding its store network.
Early this year the company projected it would open 50 new Express format stores in 2015 and five new hypermarkets.
Meanwhile, an “industry source” told the Bangkok Post newspaper following the Homeplus sale that it was unlikely Tesco would sell its stake in Tesco Lotus.
“I don’t think the Thai operation will be sold, as it is healthy and profitable with a lot of market potential and expansion,” the source said.
Questions & Answers
Q.Why would Tesco PLC consider selling or scaling back its Thai business operations?
Why would Tesco PLC consider selling or scaling back its Thai business operations?
Tesco PLC is currently under significant pressure to reduce its overall debt and improve its trading profit. The recent US$6 billion sale of its South Korean Homeplus business was a step towards achieving these financial goals.
Q.What is the current size and structure of Tesco Lotus's store network in Thailand?
What is the current size and structure of Tesco Lotus's store network in Thailand?
Tesco Lotus operates approximately 1400 stores across Thailand. The majority, 1100, are Express outlets, which are large convenience stores, while the remaining balance are larger hypermarket formats.
Q.What are Tesco Lotus's expansion plans for its Thai operations this year?
What are Tesco Lotus's expansion plans for its Thai operations this year?
The company projected earlier this year that it intends to open 50 new Express format stores during 2015. Also, it plans to launch five new hypermarkets in Thailand within the same period.
Q.Why is it considered unlikely that Tesco will sell its stake in Tesco Lotus?
Why is it considered unlikely that Tesco will sell its stake in Tesco Lotus?
An industry source indicated that the Thai operation is healthy, profitable, and possesses significant market potential. The company itself has also expressed confidence in the Thai market's growth prospects.
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