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Tesco is the UK's leading supermarket chain and narrowly overtook Carrefour in 2013 to become the world's #2 retailer, though performance since then has been dented significantly by a brutal price war in the UK and sliding sales in several other key markets. The original platform for Tesco's growth was established in the 1970s and 1980s when former managing director Ian MacLaurin fought a long and drawn-out battle with the store's founding family to drag the brand upmarket, before overseeing a range of innovative schemes during the 1990s. It leapfrogged domestic arch-rival Sainsbury's in 1995 to become Britain's biggest food retailer, and continued to steadily extend its lead while also broadening its footprint considerably with an aggressive move into non-food merchandise. Tesco broke the £3bn profit barrier for the first time in 2008. After that, the group began looking mainly to the international market for further expansion. Most of its non-UK operations are concentrated in Eastern Europe and Asia; a bold attempt to break into the US market in 2007 ended in failure five years later, and that setback was followed by a series of reverses in other markets, including the UK, leading to a change of CEO at the end of 2014. In 2018, Tesco took steps to meet discounters Aldi and Lidl head-on with its own low-cost chain, Jack's.
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Tesco is firmly established as the UK's biggest grocery retailer, as well as one of the leaders in non-food items. By Feb 2018, the group managed an estate of 3,435 stores across the country, contributing over two-thirds of combined group revenues. There are a further 150 stores in the Republic of Ireland. It is Great Britain's biggest private employer with more than 330,000 staff.
The group operates across multiple different formats, with 252 Tesco Extra hypermarkets, 480 Superstores, and 1,750 Tesco Express petrol stations as well as local convenience stores or Tesco Metro urban outlets. The convenience store group was created from the acquisition of convenience store operator T&S Stores in 2003, and of the Cullens, Harts and Europa outlets in London a year later. Although most of these stores have converted to the Tesco Express fascia, around 775 former T&S stores still operate as One Stop.
During the 2000s, the group acquired a string of different diversified subsidiary businesses in the UK. Until recently, several larger stores housed outlets of The Nutri Centre, a complementary medicine retailer in which Tesco acquired a majority stake in 2001. However, the group shuttered that business in 2016, closing all outlets. In 2007, the group took the market by surprise with a move into gardening and outdoor furniture. It agreed to acquire a majority stake in Dobbies Garden Centres, with 35 stores in Scotland and England, for £156m. Other less well-known sidelines were Harris & Hoole, a chain of artisan coffee shops in which Tesco held a minority stake, and family-friendly restaurant chain Giraffe. All three were sold in June 2016 to different buyers.
Moving from divestments to acquisitions again in early 2017, Tesco announced the acquisition of leading wholesaler Booker for £3.7bn. Booker supplies a huge estate of around 125,000 independent convenience stores, but also, significantly, several major restaurant chains, giving Tesco a foothold in "out-of-home" eating. It also controls the Booker Wholesale and Makro cash and carry warehouses, as well as the Premier, Londis and Budgens symbol groups. To the surprise of rival retailers and wholesalers, that purchase was cleared without conditions by regulators.
Tesco's core sector is of course groceries. According to data from Kantar Worldpanel, Tesco's share of the UK grocery market peaked in June 2011 at 31.4%, but has slipped back from those highs since 2012, when its lead dipped for the first time in a decade or more. Those changes prompted an overhaul of local management as well as a review of its advertising business. New CEO Dave Lewis, appointed at the end of 2014, announced a series of dramatic cost-cutting moves including store closures, fewer openings and a reduction of product range by as much as a third in 2015. Yet the competitive pressure remains relentless, and Tesco's market share has remained below 30% ever since. For most of 2017, it was slightly below 28%, though still more than 10 full percentage points clear of closest rival Sainsbury's.
The group also faces fierce competition in Ireland. Local rival Supervalu overtook it as the local #1 at the end of 2015, and it slipped into 3rd place towards the end of 2016 behind another local, Dunnes. By late 2017, all three were closely matched at around 22% share apiece.
In addition to a wide selection of third-party products, the group markets an extensive range of own-label brands. Tesco was comparatively late into this sector, introducing its first own-label range only in 1986, primarily targeting the higher end of the market. However, it has managed to establish a clear lead over local competitors and especially international rivals, who have in general been much slower to develop own-label ranges. There are four main "pillar" brands. Tesco Finest is the main premium label, launched in 1998, and now encompassing around 2,300 lines of prepared, fresh or ambient foods. Combined sales are around £1.4bn. It is supported by Tesco Organics, the store's oldest own label line, first introduced in 1986 and now extending to around 1,400 products; as well as smaller Tesco Healthy Living (500 lines). At the bottom end of the market is Tesco Everyday Value, with around 565 product lines. It was relaunched in 2012 with a big marketing push.
Additional supporting brands include Free From, Fair Trade, Kids and Carb Control. Combined sales from all own-label brands were estimated (by TNS Worldpanel) at more than £10.0bn by 2008. In 2011, the group began moving in a slightly different direction with the launch of its first "venture brands". These were exclusive and wholly owned but not Tesco-branded. The first five launches were Yoo fruit yoghurts, Chokablok ice cream, Lathams dogfood, Nutricat catfood and Italian foods range Parioli. They were followed in 2012 by Yum butter and spreads, produced under contract for Tesco by Arla. However that line was withdrawn two years later as a result of poor sales. Most of the other products were also subsequently phased out. In a renewed assault on the own-label segment, Tesco launched seven new private label food brands in 2016 to replace existing Everyday Value lines. They include Redmere Farms (for vegetables), Nightingale Farms (salad), Boswell Farms (beef) and Willow Farms (chicken). The names prompted some negative feedback in the media. Not only do the named farms themselves not actually exist, but the produce is either partly or entirely imported.
Key to Tesco's relentless growth has been its ability to manage and evaluate huge quantities of customer sales information, and use this to manage store inventories at a local level and fine-target promotions which are most likely to appeal to regular customers. It is widely regarded to be more skilful than any equivalent retailer at managing the intricacies of multiple store-formats, from local convenience outlets to hypermarkets. The information which underpins this excellence is derived from the Tesco Clubcard, now the country's most popular loyalty reward scheme with more than 16m members. It has another 20m members in the rest of Europe and 7m in Asia. Extensively detailed data on the shopping habits of cardholders is analysed and interpreted by marketing agency Dunnhumby, which has overseen the Clubcard since its launch, and in which Tesco acquired first a majority shareholding, and then outright control.
As a result of its success with Tesco, Dunnhumby also won responsibility for loyalty marketing for several other retailers including Casino of France and Gruppo Pam of Italy. In 2015, it sold its shares in DunnhumbyUSA to its local partner, the grocery giant Kroger, which rebranded the business as 84.51 Degrees. It retains a US presence, now free to work with other clients. The same year, the group put the remainder of Dunnhumby up for sale with a notional price tag of almost £2bn. Despite interest from various parties (including WPP in conjunction with private equity backers), bids received were well below that level, and the decision was made to keep hold of the agency. A key concern for bidders was Dunnhumby's close relationship with Tesco, and whether that could be maintained following a sale. After abandoning plans for the sale, a new commercial services agreement was signed between Tesco and Dunnhumby to formalise their relationship. However, that resulted in a sharp decline in the agency's profits. It remains a very considerable business, with revenues of over £360m for the year to Feb 2017.
Tesco has steadily extended its brand power into other areas, and UK revenues from general merchandise, clothing & electrical goods had grown to £5.3bn by the year to 2011. However, this segment suffered most in ye 2012, slipping by almost 4% on a like-for-like basis. Non-food products generated a further £5.0bn in international markets. Tesco sells a wide selection of entertainment products such as music, video, games and books. In 2004 it added to its range with a DVD mail order rental service and jumped into the music download market, with its own service undercutting the prices of rivals iTunes and Napster. In 2006 it launched Tesco Software, a range of low-cost consumer-oriented applications; followed a year later by Tesco Book Club, publishing special monthly editions of selected bestsellers in a partnership with Random House. In 2010, the group announced plans to go into movie production, backing adaptations of popular bestsellers which would go straight to DVD for sale through the company's stores. The following year it acquired an 80% stake in online movie streaming service Blinkbox, positioned as a direct rival to Netflix and Amazon's Lovefilm. According to Kantar Worldpanel figures, Tesco overtook HMV in summer 2013 to become the UK's second largest entertainment retailer, with 13.2% market share (12 weeks to June 2013). The significant reverses in UK performance during 2013 and 2014 prompted a change of strategy. At the beginning of 2015, Blinkbox was sold to telecoms group TalkTalk for around £5m. However Tesco remains the biggest bricks and mortar entertainment retailer with 16% share in Sept 2015 (behind Amazon at almost 22%; HMV had just over 12%).
The store is also a major force in clothing and electrical goods. In 2002, Tesco negotiated the exclusive UK license to sell Cherokee clothing through around 200 of its largest UK stores. The group also manages an growing range of private label Tesco Clothing lines under brands including F&F (or Florence & Fred), Stone Bay and larger sizes range True. F&F alone has sales in excess of £1bn in the UK. In 2015, according to Kantar research, Tesco was the #4 UK apparel retailer by volumes, behind Primark, Asda/George and M&S. The group also sells a wide range of electrical items, including televisions, monitors and DVD players under private label brand Technika. In 2013 it launched its own tablet computer product under the Hudl brand, to support Blinkbox and its other entertainment services. The group took its first steps into the telecoms sector in 2003. Tesco Talk offers lower-priced calling plans to residential customers, in partnership with Cable & Wireless, which supplies wholesale call minutes. A similar service, Tesco Mobile, was launched as a joint venture with O2. It claims to be the UK's largest MVNO with more than 4.5m customers. In one of its more surprising experiments, the group launched a website in 2011 to sell secondhand cars under the name TescoCars.com as a joint venture with established seller Carsite. That business was shuttered in 2012.
The group has also had remarkable success with its online and direct offering. A separate service, iVillage UK, which Tesco acquired from its US parent in 2002, was quietly sold back to iVillage.com in 2005. For several years, Tesco also owned a substantial minority stake in GroceryWorks, the online operation of US supermarket retailer Safeway, operating in California. It sold its shares to its US partner in 2006, prior to its own US launch. In 2007, mail order service Tesco Direct was launched nationally, and it now offers a total of 15,500 non-food items for home delivery or instore collection.
Tesco's dominance in the UK has led to repeated calls from smaller rivals for some form of regulatory curb on further expansion. The move into convenience retailing in particular has helped to squeeze smaller independent stores out of the British high street. In 2006, the UK's Office of Fair Trading bowed to pressure from the Association of Independent Retailers to launch an investigation into the power of the four major supermarket chains. Tesco in particular was accused, even by its major rivals, of blocking competition by buying up undeveloped retail sites and leaving them empty in order to block other chains.
Combined net revenues from the UK & Ireland in ye 2019, excluding fuel but now including Booker wholesale, were £44.9bn, up 16% on the year before, or £51.6bn including fuel. (The Irish Republic accounted for almost £2.4bn of that total). Operating profit before exceptionals topped £1.5bn.
The group has also established a strong presence in financial services. Tesco Bank manages around 6.6m customer accounts, with multiple products and services ranging from credit cards and savings to home, travel and pet insurance. Total customer savings deposits were £6.0bn. There is also a financial services price comparison service at TescoCompare.com. Initially, Tesco Personal Finance was a joint venture with Royal Bank of Scotland. In 2008, however, Tesco agreed a deal to buy out its partner's 50% stake for £950m. That move was the preface to a diversification into full-service banking. The group installed instore bank "branches" in selected larger stores, and now offers loans and mortgages alongside savings and insurance.
Combined revenues from Tesco Bank in the year to 2019 were almost £1.1bn, with operating profit of £197m.
In support of its UK operations, the group also expanded widely in other countries. The main regions in which it operates are Eastern Europe and Asia. It is now a leading food retailer in Poland (Tesco Polska with 415 stores), the Czech Republic (Tesco Czech Rep, 189 stores, excluding franchisees), Hungary (Tesco Hungary, 206 stores) and Slovakia (151 stores). Its presence in the latter two markets was boosted in 2005 when it swapped its own outlets in Taiwan with those of Carrefour in the Czech and Slovak republics. The most valuable of these European markets is Poland, with sales of £2.0bn in ye 2019, more or less the same as the Republic of Ireland generated from just over a third of the number of stores. Hungary, the Czech Rep and Slovakia each contributed between £1.2bn and £1.5bn. Combined sales in ye 2019 from Central Europe were £6.1bn with operating profit of £186m. Another retail business on the outer edges of Europe has been sold. Tesco acquired Turkish hypermarket operator Kipa in 2003, with 173 stores in that country. The business was divested in 2016.
Until recently, Tesco's biggest international market by revenues was South Korea, where it operated as Homeplus, initially in a joint venture with Samsung's trading arm. Revenues were £5.38bn in ye 2015. It built its estate through acquisition to 1,075 outlets by 2015, half of them owned and the rest franchised. In 2008, for example, it agreed to spend almost £1bn to acquire a group of another 36 large Homever stores around Seoul from local retailer E-Land, making it the country's second largest food retailer after E-Land, with 475 outlets. It later bought out Samsung. However, performance has been weak as a result of a slowdown in the local economy and in Sept 2015 Tesco took the decision to pull out of Korea altogether, agreeing to sell Homeplus Group to a consortium of investors for just over £4.0bn in cash. The group retains a presence in two Asian markets. It is the leading retailer in Thailand with over 1,950 stores under the Tesco Lotus brand, and sales of £4.1bn in ye 2019. It has a much smaller presence in Malaysia, where it acquired several warehouse stores from Makro in 2006. Sales were £818m. Combined sales in ye 2019 from Asia were £4.7bn with operating profit of £279m.
Negotiations to launch in India through a joint venture with local conglomerate Bharti Group ended without agreement in 2006. Two years later, however, the group sealed a deal with another conglomerate, Tata, to open several cash-and-carry centres in Mumbai and other cities, supplying its partner's Star Bazaar stores. The group has gradually rolled out successful UK initiatives in its international markets as well. It offers the Tesco Clubcard service in seven countries, and F&F clothing in more than ten.
Not all the group's excursions into foreign markets have been successful. Tesco moved into China in 2004, paying £140m to acquire a 50% stake in Hymall, a chain of grocery superstores, mainly in Shanghai. It ended up with 134 stores in the country, a combination of hypermarkets and Tesco Express outlets in Shanghai, Beijing and Shenzen. However this business has struggled to make profit, and in 2013 Tesco agreed to transfer its stores in China into a joint venture with state-owned CRE, which controls the Vanguard retail chain. Tesco ended up with a 20% shareholding in the enlarged business.
In 2003 Tesco acquired Japanese convenience store operator C Two-Network, which had 80 stores in and around Tokyo, and added an additional 25 stores from ailing rival Fre'C in 2004. By 2011, there were around 130 small-format convenience-style stores in the country. However, the group announced plans to quit this market altogether later that year, putting the stores up for sale.
Tesco's most ambitious international launch to-date was its attempt to crack the US market. The first stores opened in California in October 2007 under the Fresh & Easy banner. Breaking with the precedent set by any of its other outlets, Tesco's new chain adopted a hard discount convenience store format. Unlike the Tesco Express convenience stores in other markets, however, Fresh & Easy specialised in own-label, low-priced fresh and prepared foods, with few national brands, and only self-service checkouts to keep costs low. It slowed expansion in 2008 in order to allow the new stores to "bed down", leading to media speculation that things were not going as well as expected. Further outlets were tested in Arizona and Nevada. Yet despite pockets of success, Fresh & Easy failed to gain traction with US shoppers. At the end of 2012, the group finally conceded defeat, announcing a "strategic review". After months of talks, an agreement was reached with investment company Yucaipa, which agreed to take three quarters of the stores off Tesco's hands at a cost to the retailer of £150m in loans, assumed liabilities and the cost of closing the remaining 50 outlets. Yet Yucaipa was unable to turn around the business, and the remaining stores closed at the end of 2015.
Results for the year ending February 2013 reflected the various challenges faced by Tesco during that year, including a slowdown in the UK and Eastern Europe and the planned exit from the US. Total net revenues were £65.85bn, up around 2% overall. (Gross revenues including VAT rose over 1% to £72.36bn). However, net profits were effectively wiped out a collection of one-off charges, including more than £1bn against the exit from the US, £800 of property impairment in the UK and almost £500m of goodwill impairment against operations in Poland, the Czech Republic and Turkey. Net profits including all those items plunged from £2.8bn in ye 2012 to just £120m for ye 2013. However, the US and Chinese businesses were classed as discontinued for the sake of the statutory accounts, allowing them to be excluded. As a result, continuing net revenues were stated as £64.83bn, up 1.4%, and statutory pretax profits fell by a lower but still dramatic 51% to £1.96bn.
For the year to Feb 2014, net revenues slipped 3% to £63.56bn (or £70.89bn including VAT), reflecting divestments. Comparable revenues from continuing operations edged up by just 0.2%. Statutory pretax profits, including adjustments and impairments, rose by 10% to £2.26bn. However excluding non-cash items, underlying profits fell 7% to £3.05bn.
Fierce competition on price caused another decline for the year to 2015, with net revenues down 3% to just under £63.0bn (£69.65bn gross). Underlying profits plunged 68% to £961m, but a massive £7bn impairment charge resulted in a statutory pretax loss of £6.38bn, the biggest loss ever recorded by a UK retailer. The group took the opportunity to write-off value against multiple items, including £3.8bn against the value of existing UK property, another £925m against abandoned new openings, £630m against its Chinese joint venture, and additional amounts against a variety of other areas.
Tesco was back in the black again for ye 2016, what CEO Dave Lewis billed as "a year of significant progress". Net profit came in at a modest £129m (or £162m pretax), but that was a big improvement after the previous year's loss. Under the hood, the progress was slightly less inspiring. Excluding all exceptional items, this year's net profit of £353m was actually down from the prior year's £516m. Continuing revenues for the most recent year were also down, by 4% to £54.4bn. That was partly the impact of lower fuel prices, and partly currencies. At constant rates the group claimed a 0.1% overall increase. Yet it was definitely a move in the right direction. UK like-for-like sales rose just under 1% in the final quarter, while group LFLs were up by a more robust 1.6%.
For the year to 2017, Tesco reported the first full-year growth in UK same-store sales since 2010, with food up 1.3% year-on-year, and total sales by 0.9%. Similar performance in its European and Asia divisions resulted in a 4% lift in continuing group revenues to £49.87bn. Statutory net revenues, including £6bn in sales of fuel, were up slightly to £55.92bn. Group operating profit before exceptional items surged by almost 30%, led by a spectacular 60% recovery in the UK and Ireland. However, statutory pretax profit was dented by a £235m fine relating to the 2014 accounting scandal, falling 28% to £145m.
Net profit for the year to Feb 2018 rebounded to £1.2bn, definitely on the road to full recovery. Figures included a one-off gain on the sale of the group's Turkish subsidiary, but on a comparable recurring basis, bottom line was up almost 70% year on year to £857m. Revenues rose just under 3% to £57.5bn. Virtually all the gains were made in the UK and Ireland, with like-for-like comps up 2.3%, compared to a 10% decline in Asia and growth of only 0.7% in C&E Europe.
Revenues for ye 2019 rose by 11% to £63.9bn, while pretax profits jumped 29% to almost £1.7bn. In the UK, Tesco's like-for-like retail sales were up by a little under 2%, but Booker jumped 11%. There were single-digit declines for group operations in Europe and Asia.
Tesco suffered significant management turmoil between 2011 and 2014 as a result of a sharp downturn in performance. Sir Terry Leahy oversaw the substantial expansion of the business between 1997 and 2010. However, he retired in March 2011, and was replaced by Philip Clarke, previously international & IT director. That coincided with an aggressive push by discount retailers Aldi and Lidl. After three years of fierce competition, Clarke resigned in summer 2014 and he replaced by longtime Unilever executive Dave Lewis. John Allan succeeded Sir Richard Broadbent as non-executive chairman in 2015. Lewis has announced plans to depart Tesco in summer 2020, and will be succeeded by Ken Murphy, former chief commercial officer of Walgreens Boots Alliance.
Richard Brasher was appointed as CEO, Tesco UK & Ireland in 2011, but he too left the company the following year as trading slumped. Chris Bush was eventually appointed as managing director of Tesco UK in 2013, but he was suspended the following year in the wake of accounting irregularities and subsequently left the business along with three other managers. Bush and two colleagues were subsequently charged with fraud; their trial began in Autumn 2017. After a whole year of deliberation, the case was dismissed for lack of evidence and the three men were found not guilty. (They later claimed they hads been "fed to the wolves" by Tesco senior management). In the mean time, Bush's duties were initially absorbed by Dave Lewis. Matt Davies was eventually appointed as UK & Republic of Ireland managing director in June 2015. However, he was replaced in 2018 by Charles Wilson, previously head of wholesaler Booker. Only a few months later, though, Wilson stepped down from an executive role for reasons of ill-health, and was replaced by Jason Tarry.
Jack Cohen started selling cheap groceries from a market stall in London's East End in 1919. His first products were fish paste and sugar syrup, but in around 1924 he began to retail packet tea, supplied by wholesaler TE Stockwell. This he named Tesco, a brand created from an amalgamation of the names TE Stockwell and Cohen. The name stuck, and Jack Cohen opened his first Tesco shop in Edgware in 1929. Business boomed and a series of other shops were opened in and around London before the start of World War II. Cohen had become increasingly influenced by the sales philosophy of American retail groups, and he got his first opportunity to put them into practice after the war. The company went public in 1947, and Cohen moved to self-service shopping the following year. The Tesco philosophy, as conceived by Cohen, was "Pile it high and sell it cheap". (Another favourite slogan, first coined in his market trading days was "Always keep your hand over the money and be ready to run.") In 1956, he opened the first UK supermarket, broadening the product range to include fresh food and clothing.
The group grew rapidly through acquisition, swallowing other retail chains around the country. Another American import was Green Shield stamps, introduced in 1963. At the time, legislation forced all retailers to sell goods at the manufacturer's specified price. With no opportunity to discount, it was hard for any store to develop its customer base by competing on price. However, Green Shield stamps allowed customers to build up loyalty points, which could be redeemed for cash or against other goods. These proved popular with Tesco customers, and as the business got bigger, so did the stores. Tesco coined the term superstore in 1968 when it opened a 90,000 sq ft store in West Sussex, then the largest in Europe. Cohen was knighted the following year.
During the 1970s, Tesco found its development increasingly hampered by its generally down-market image, a legacy from the "pile it high" days, as well as by Cohen's autocratic, aggressive and often undisciplined leadership style. Ian MacLaurin, a former management trainee who had worked his way up to become the company's managing director, dubbed Cohen "Slasher Jack" in his autobiography, and described company board meetings as being "like a meeting of the Chicago mafia, with Jack in the role of Godfather". Nevertheless, the group slowly began to move upmarket, closing older city centre outlets in favour of out-of-town superstores. Tesco introduced the first supermarket forecourt petrol station in 1974, and slowly rolled out the concept nationally. Despite the move upscale, Tesco didn't abandon its reputation for keen prices - its "Operation Checkout" discounting promotion in 1977 increased the store's market share from 7% to 12% in just one year. That year also witnessed the first cracks in Cohen's steely control of the business, after MacLaurin and Cohen clashed over the issue of Green Shield stamps. Cohen saw them as the cornerstone of the business, but MacLaurin argued that they promoted a downmarket image for the store. To Cohen's dismay, Tesco's board of directors supported MacLaurin over the company's founder and the scheme was dropped.
The 1980s became a time of considerable transition for the group. Sir Jack Cohen died in 1979, and was replaced as chairman by his malleable son-in-law Leslie Porter. Within the company, MacLaurin began a complete overhaul of the business, gradually prising it away from Porter and the Cohen family in what became an increasingly bitter struggle. MacLaurin replaced Porter as chairman in 1985. His first challenge was a bid by Cohen's daughter Dame Shirley Porter to join the board, but she was rebuffed.
The 1990s saw a series of innovations which left Sainsbury's standing. The remaining city centre stores were given a complete overhaul, rebranded as Tesco Metro from 1992 onwards, while the petrol forecourt outlets were grouped under the Tesco Express brand. The Tesco Clubcard, introduced in 1995, was a brilliant innovation, replacing the old trading stamps concept with a more upmarket reward scheme which also allowed the store to track purchasing habits in extensive detail. It was rapidly adopted by other retailers, including Sainsbury's, which was also quick to copy Tesco's launch of a banking service in partnership with Royal Bank of Scotland in 1996. In 1997, Tesco was the first UK food retailer to offer an Internet-based home shopping service, and the Tesco Extra hypermarket format was launched for the biggest stores the same year. A year later MacLaurin retired as chairman. Following the lead of Dixons, the home shopping service was bundled into a free ISP service, Tesco.net, in 1999.
Over the following years, the group became increasingly active in the international market. An initial foray into the Republic of Ireland in 1979 was abandoned during the 1980s. In 1993, the group made another attempt to go abroad, acquiring 100 Catteau supermarkets in northern France for £158m. By 1995, the group had added a hypermarket in Paris and a wine shop in Calais, both under the Tesco name. However all were sold two years later. Eastern Europe proved more fruitful for the group. In 1994, Tesco bought a controlling share of the Global S Markt supermarket chain in Hungary, followed by Poland's Savia chain and other stores in 1995. Tesco entered the Czech Republic and Slovakia in 1996, spending £79m to buy American supermarket chain K-mart's stores there. In 1997, the group returned to Ireland, buying 109 stores from Associated British Foods for £630m to become the country's leading supermarket business. In 1998 the group acquired Lotus, the second largest retailing business in Thailand with 13 modern hypermarkets, and followed this in 1999 with a partnership deal with Samsung Corporation to develop hypermarkets in South Korea. In March 2000 the group announced plans to open 20 hypermarkets in Taiwan over the next five years. At the end of 2000 the group announced it had teamed up with Asian conglomerate Sime Darby to open 15 hypermarkets in Malaysia.
Building on the success of its online operations, Tesco took a 35% stake in the online operations of US grocery retailer Safeway. The British company agreed to adapt its successful UK model for Safeway's GroceryWorks service. In 2001, the group acquired a controlling stake in The Nutri Centre, a specialist mail order retailer selling complementary medicine products. Later the group said it would take on UK high street clothing retailers Gap and Next, following negotiation of an exclusive licence to import Cherokee American clothing, already sold exclusively through Target stores in the US and Zellers in Canada. At the end of the year, the group announced that it would acquire British convenience store operator T&S Stores for around £530m in shares and debt.
Last full revision 17th November 2017
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