Tesco slower in Asia
BELT-tightening in Asian markets has hindered Tesco’s attempts to sell its “eastern promise” message to investors.
Britain’s biggest grocer, which is hosting a four-day trip to the region for investors and analysts, yesterday reported a slowdown in Asian sales growth for the 10 weeks to November 1, including a 2 per cent drop in like-for-like business in South Korea, its biggest market outside the UK.
Turnover growth in China slowed from 14 per cent in the first half of the year to 8 per cent.
Shares in Tesco lost nearly 6 per cent of their value, down 20bp to 323p. “While these patterns are hardly disastrous, they suggest consumers are acting more cautiously,” said Citigroup analyst James Anstead.
Tesco had talked up the “dramatic progress” in Malaysia, where sales growth has accelerated from 1 per cent to 2 per cent, he added.
Asia contributed about £6billion to Tesco sales last year, nearly half its international total. Tesco plans to increase its total of hypermarkets in South Korea from 110 to 167 by 2012.