Tesco could follow Walmart

14 May 2011 - 14:37 By THEKISO ANTHONY LEFIFI

Tesco, the UK's largest retailer and Walmart's toughest competitor there, has reportedly been meeting with SA retailers.

However, it is not clear whether Tesco is looking at buying controlling stakes in any of them.

Tesco's executives are rumoured to have held discussions with Shoprite and Pick n Pay executives.

However, Shoprite's CEO Whitey Basson said there had been no meetings with Tesco "to discuss business mergers, selling of stakes or any other business deal".

Jonathan Ackerman, customer director at Pick n Pay, would not be drawn on the Tesco executives' visit, but did say: "I know that they were in town."

Pick n Pay spokesman Tamra Veley denied that the group was in negotiations with Tesco.

Veley said: "Pick n Pay is a member of the global Consumer Goods Forum and Gareth Ackerman is a board member.

"We frequently host international retailer representatives in SA as a courtesy - and they often host us too.

''Tesco visited last month and were particularly interested in taking a look at our new generation flagship store, Pick n Pay on Nicol (in Johannesburg)."

Bryan Roberts, retail insights director at Kantar Retail EMEA, said Tesco was monitoring Walmart and Massmart's developments with keen interest as "SA is definitely on their radar screen for future market entry. They have a similar strategy to Walmart in wanting to access the big growth opportunities of the future."

Natalie Berg, global research director at Planet Retail, said SA had "plenty of opportunities" for acquisition for a company like Tesco.

Kantar Retail favours Pick n Pay as the most appropriate business partner for Tesco in terms of store formats, private labels, loyalty marketing, trading style, positioning and potential synergy. Their views are supported by Berg, who said: "Pick n Pay is a match made in heaven for Tesco."

Tesco, the world's third-biggest retailer after Walmart and French group Carrefour, operates in 14 countries and has more than 5000 employees worldwide.