Tesco-Lotus stores may be sold in Thailand

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Tesco-Lotus stores may be sold in Thailand

Post by Gaybutton »

Tesco may sell Thailand, Malaysia businesses

December 9, 2019

LONDON: Britain's biggest supermarket chain Tesco said on Sunday it had started a review of its businesses in Thailand and Malaysia, including looking at a possible sale.

It said in a statement that "following inbound interest, it has commenced a review of the strategic options for its businesses in Thailand and Malaysia, including an evaluation of a possible sale of these businesses."

"The evaluation of strategic options is at an early stage, no decisions concerning the future of Tesco Thailand or Malaysia have been taken, and there can be no assurance that any transaction will be concluded. A further announcement will be made if and when appropriate," it said.

The deal could value the operations at as much as $9 billion (273 billion baht), Dow Jones reported earlier, citing people familiar with the plan. Tesco spokesman Simon Rew declined to comment on the valuation.

Tesco Thailand, branded as Tesco Lotus, launched in 1998 and has 1,967 stores. The Malaysian business started in 2002 and has 74 stores. The Thai business alone could be valued at nearly $7 billion (212 billion baht) because it includes real estate assets, Dow Jones reported. In the first half of fiscal-year 2020, the retailer’s entire Asia business produced 2.6 billion pounds (103 billion baht) of revenue, accounting for about 8% of total sales.

Under outgoing Chief Executive Officer Dave Lewis, Tesco streamlined its domestic business with thousands of job cuts and pulled back from some international markets, including costly exits from Japan, the United States and China. Ken Murphy, who will replace Lewis, was known for spearheading Walgreens Boots Alliance Inc’s push into China. Murphy will have to wrestle with a growing UK retail crisis exacerbated by Brexit, the shift to online shopping and competition from discounters Lidl and Aldi.

If Tesco does quit Thailand and Malaysia, its only overseas operations, apart from Ireland, will be its loss-making central European division, consisting of stores in the Czech Republic, Hungary, Poland and Slovakia.

https://www.bangkokpost.com/business/18 ... businesses

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Re: Tesco-Lotus stores may be sold in Thailand

Post by ceejay »

CP group started the Lotus chain and had to sell out to Tesco in the aftermath of the 1997 Asian financial crisis. I have sometimes read rumours that they have harboured ambitions to get it back ever since. They already own 7-11 and Makro and that would be enough to exclude them on competition grounds in Europe or America but, if it is them, they will end up getting what they want. They usually do.

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Re: Tesco-Lotus stores may be sold in Thailand

Post by Jun »

As far as I can see, Thailand needs more competition in retail, not less.
Tesco Lotus should ideally be independent from 7-Eleven. Some new entrants like Aldi or Lidl would be good, to really add some competitive pricing pressure.

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Re: Tesco-Lotus stores may be sold in Thailand

Post by Bangkokian »

Tesco is the third largest retailer in the world.

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Re: Tesco-Lotus stores may be sold in Thailand

Post by Jun »

Bangkokian wrote:
Mon Dec 09, 2019 4:53 pm
Tesco is the third largest retailer in the world.
They might well be, although according to some sources, they are now down to 4, behind Walgreen Boots.

They are #1 in the UK, but it feels like there is much stronger competition from the big 4, plus Aldi and Lidl, not to mention premium offerings like Waitrose and some smaller chains.

In Thailand, it almost looks like the price is fixed on some products.

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Re: Tesco-Lotus stores may be sold in Thailand

Post by thewayhelooks »

New management at Tesco would be welcome. I am fed up with going to TL on Sukhumvit and standing in long lines at the checkouts, usually behind a Thai with a trolley filled with a hundred packets of noodles, with only five of their 25 checkouts open. As for Aldi, Radio 103 was running ads earlier this year which seemed to indicate Aldi was heading in this direction, then, after several months, they stopped. And no Aldi.

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Re: Tesco-Lotus stores may be sold in Thailand

Post by Jun »

Tesco in the UK also think their customers should be prepared to wait for the privilege of handing Tesco our money. My business has mostly gone to Sainsbury's, Aldi and Lidl (One at the quality end of mid-market and 2 German discounters with much improved ranges).

The 2 German companies would be ideal for Thailand in my view. They should bring in some proper competition on pricing and be good for the Thai consumer.

Tesco just seem to be mismanaged and in decline.

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Re: Tesco-Lotus stores may be sold in Thailand

Post by Gaybutton »

Jun wrote:
Tue Dec 10, 2019 10:40 am
Tesco just seem to be mismanaged and in decline.
Instead of doing something about it, they just keep everything status quo. In Thailand they don't sell enough farang products to suit me. Big-C Extra, Best, and of course Villa Market carry plenty of farang products and those stores are my first choice. Tops comes in second, although in Pattaya the Tops in Central Festival has a good supply of farang products, many of which I never see elsewhere.

Tesco-Lotus is usually my last choice. In my opinion they are not even in the same class as the stores mentioned above.

They also always ask for their "member card," which I always show and they scan. I have yet to ever see any benefit of that for me.

If Tesco-Lotus does indeed sell out to some other company, fine with me, whichever company ends up taking over.

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Re: Tesco-Lotus stores may be sold in Thailand

Post by pong »

The german giants A and L- L is limited to Europe anyway and A is also present in AUstralia and US, where they lack the advantage of their name being known. Expect also big and pretty nasty changes in the UK once that brexit is there. Thats the main reason L restricts itself to EU in general.
However as for TH none of these will come. They do not have any presence in Asia now and in fact there have been several trials for low-budget disxount stores here and all failed-miserably. The Thai simply do not take it. IF at all China will be the first market to try out and dip a toe in the water.
There seems to be an Isan chain of budget stores of which I forgot the name already and this does seem to have plans to expand to BKK and close by but out of Isan. But they sell mainly bulk=whole boxes etc.
That for many goods there is a near universal price is pretty common in developing countries-thats simply the minimum for which stores are able to sell. The same applies to most EUR countries for the lowest priced daily items. The major upmarket chains sell these for same price as A or L or whatever.Tesco at that time also had to rescue Lotus as Lotus simply could not find a way to make those giant and out of town stores profitable-they lacked then the expertise and knowledge. Same-same for TOPS-they were set up in cooperation with the Dutch supermakret giant Ahold. At that time also the Belgians came with FoodLion (Delhaize-since a year or 2 now merged with Ahold)
Teco it seems has thus already given upon China.
Tesco is quite big in East-EUR since they also bought Carrefour stores there some time ago. But apparently there they cannot make a profit.
Tesco does hardly make any profit in TH with the shops itself but they do make money as via it they can very cheaply import items for the UK-major chain.
(my younger brother works in the retail and knows about anything about operating supermarkets and who owns whom in the end)

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Re: Tesco-Lotus stores may be sold in Thailand

Post by ceejay »

So, it has been decided. Announced today that the sale will be to CP Group

https://www.bbc.com/news/business-51796815

With them now owning Lotus Express and already owning 7-11, that can hardly be good for competition.

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