BY CAROLINE CUNHA
TESCO, the UK’s leading supermarket group, has its sights set on Portugal as part of its ongoing expansion plans, The Resident learned this week.
It is understood that a total of 17 sites have already been earmarked in the Algarve alone, including locations in Albufeira and Faro.
The company’s plans are believed to include the opening of Tesco Express stores through to the hypermarket sized Tesco Extra stores.
No formal announcement has been made by Tesco, although it is believed that the company is already involved in negotiations with the Portuguese Government.
According to The Resident’s source, an individual close to the company in the UK, it is not just Portugal that is being targeted, “Tesco is looking at expanding its operations to Portugal, Spain, Italy and Sicily,” he said.
When asked when Portugal might see the opening of its first Tesco store, he replied: “I know that the company is currently in negotiation with the Portuguese authorities so it depends on them, but, with Tesco there is no messing around, as we have seen elsewhere. It would be quick, probably within a year once approval is granted.”
The source said Tesco does not want to miss out on the potential in the country, since non-Portuguese grocery retailers such as Aldi, Lidl and Plus, for example, are already operating successfully in Portugal.
“I think that Aldi’s recent emergence in Portugal has really opened up the doors to the international scene,” he told The Resident. “It is well known that Tesco isn’t allowed to open more stores in the UK, its expansion is being heavily curbed there and therefore the company has to look elsewhere for opportunities.”
No comment
When The Resident first received information about Tesco’s plans in Portugal, we contacted the company’s central press office in the UK.
“We are not prepared to make any comment at all,” a spokesman said. “Our policy is not to comment on expansion plans because we do not want our competitors to know about new stores before our customers.
“We have been concentrating on expansion in Central and Eastern Europe and South East Asia. What I can tell you is that we tend to target regions, as it makes logistics and distribution much easier and more viable.”
When asked if the Iberian Peninsular was such a region, the spokesman refused to be drawn. The Resident also contacted the Agência Portuguesa para o Investimento (API), the Invest in Portugal agency, a government agency that is part of the Ministry for Economic Affairs to see if it could confirm the Tesco deal.
An API spokesman said: “API does deal with foreign and national investments valued above 25 million euros and investments from companies with annual turnovers of over 75 million euros, however it does not comment on any pending investments – all details are entirely confidential.
“Once a formal agreement has been made with the government and everything has been signed and agreed, our policy is to wait for the company concerned to make its own announcement. Only after this will we release a statement and announce it on our website (www.investinportugal.pt).”
Supermarket giant
Tesco is the UK’s largest retailer and one of the world’s leading international retailers. Tesco operates over 2,670 stores employing over 370,000 people.
Outside the UK, the Tesco group operates in 11 countries across Europe and Asia. In Europe Tesco operates 363 stores and has over 68,000 employees in the Czech Republic, Hungary, Republic of Ireland, Poland, Slovakia and Turkey.
In Asia, Tesco operates 444 stores and employs over 56,000 people in China, Japan, Malaysia, South Korea and Thailand.
In addition to this, details emerged last week of the retailer’s plans for the west coast of the US, where it has said it will spend 250 million pounds sterling opening some 150 stores over the next two years.
Secrecy
Much like the Portugal deal, Tesco’s expansion into the US has been shrouded in secrecy, but some details are emerging now as the chain starts to build an infrastructure. It plans to operate in three western states: California, Arizona and Nevada. The California operation will focus on the south, around Los Angeles, and Phoenix and Las Vegas will provide the bases for the other states.
