7/21/2006

Tesco buys Casino stores in Poland

Leader Price, which made sales of more than €240m in 2005, will be added to Tesco's existing 107 stores in Poland, and could been seen as something of a coup, regarding rival retailer Carrefour's interest in the sale as well.

The deal, widely expected by analysts, expands Tesco's reach in one of its most important emerging markets.

The group employs 200,000 people in Poland and claims to source 1,500 products from inside the country.

“Poland is one of Tesco's success stories of the last ten years,” said professor Joshua Bamfield, director of the Centre for Retail Research.

He suggested Tesco's success in Poland may have helped push Casino into a sale. “When these new markets emerged, western companies all wanted their share – unfortunately not everyone can get the prizes.” Tesco's better efficiency, he added, had helped it to get ahead of rivals.

Any thoughts Tesco may have of dominating Eastern Europe's food retail market still require more work, however.

The firm reportedly only has a 5.5 per cent market share in Poland, although it also owns stores in Hungary, Slovakia and the Czech Republic.

And it may face more competition from France's Carrefour, which has announced plans to double its Polish store numbers over the next five years by investing between PLZ250-300m (€65-78m) on an annual basis.

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