Identifying a precise point in time when Tesco went from being a UK-based grocery chain with operations outside the country to a truly global retailer is no easy task. While some would argue the group still has some way to go before it becomes a genuinely international player, there is no doubt that the world’s third-largest grocer by revenue (after Walmart and Carrefour), and the second largest by profits (after Walmart), is closer to becoming the same kind of multinational as its bigger American and French counterparts.
Tesco is certainly reducing its dependence on its domestic market. Seven years ago, the amount of floorspace Tesco operated outside the UK overtook the corresponding figure in its domestic market for the first time. While lower sales per unit area outside the UK meant the country still accounted for more than 75 per cent of group revenue in 2004, that figure is now below 66 per cent, with only £44.6bn of Tesco’s £67.6bn total sales earned at home last year.
This evolution matters to our business because it is encouraging Tesco to centralise and streamline its fresh fruit and vegetable sourcing as far as possible. What appears likely is that the UK – and Europe as a whole – will no longer be the primary focus for many suppliers in years to come: our interview with Tesco sourcing directors Matt Simister and Darren Clough (p16-22) confirms the importance of joined-up, global procurement; and, as if to underline the economic shift that’s prompting many to grow their business in Asia, at the start of this month those same Tesco directors are due to attend the Asia Fruit Logistica trade show in Hong Kong, where they will assess new sourcing possibilities. Globalisation might not happen overnight, but its impact is already being felt within this particular industry.
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