Tesco targets 750 new convenience stores in Thailand

Tesco, Britain’s biggest retailer, says it could grow its business in Thailand by opening 750 new convenience stores in the medium term. The group currently trades from 1,583 convenience stores in the Asian country.

The possible store expansion was detailed at the group’s Capital Markets Day presentation to analysts and investors, which is focusing on “untapped value opportunities”.

Tesco is targeting further margin improvements beyond the end of its recovery plan, it said. The group said in April it had met or would soon meet most of its turnaround goals, including a key margin target of earning 3.5p-4p of operating profit for every pound customers spend by the end of its 2019/2020 financial year.

“We have the further cost reduction and mix opportunities that allow us to offset inflation, improve our customer offer and/or increase margin,” it said. The company said it would be able to enhance cash growth ahead of profit.

Tesco shares were up 1.4% in morning trade. Other slides referenced opportunities to grow the distribution capacity of its online business by 35% and to develop partnerships such as with urban fulfilment centre firm Takeoff Technologies and delivery robot company Starship Technologies. Tesco also said it plans to develop its Clubcard loyalty scheme.

Celebrating its 100th anniversary, the group is deep into a recovery plan under CEO Dave Lewis after a 2014 accounting scandal capped a dramatic downturn in its fortunes. Lewis has revamped relationships with suppliers, lowered prices versus major competitors, streamlined product ranges and improved store standards and customer service.