Striking a deal with a business partner in China would be “welcome news” for Tesco, according to City analyst Shore Capital.
Finding a business partner in China would be 'welcome news' for Tesco, said Shore Capital
Commenting on an unconfirmed Financial Times report that the retailer was seeking a local partner, analysts Clive Black and Darren Shirley said: “an appropriate partner could be found it may be welcome news, helping local insight in a market that pure western plays struggle to effectively penetrate in our view”.
Better capital discipline
The move would also assist the group’s drive to better capital discipline and would be welcomed by the market, they added.
Tesco’s markets in south-east Asia had taken on new strategic importance in the wake of the tough UK conditions, challenges in South Korea and both depressed markets and format difficulties in Europe, said Shirley and Black.
Last month the retailer announced the biggest profit fall in its history and plans to quit its US Fresh & Easy business, in a move estimated to cost £1.2bn.
