Releasing the retailer’s half-year results, Sir Terry denied that Tesco was preparing a bid for the number two supermarket chain in the US, which said last month that it was considering putting itself up for sale.
Sir Terry admitted that a team from Tesco had been exploring the possibility of an entry into the US. He said one of his first jobs when he joined Tesco in 1983 was to go and research the US. “We’re still doing it,” he said.
As The Grocer revealed in May, former trading director for grocery Colin Smith is in the US scouting out possibilities.
Neil Stern, a senior partner with US-based retail consultants McMillan Doolittle, said: “The real prizes are regional chains, primarily privately held, that dominate their markets.
“Examples include Wegmans in the north east, Publix in Florida, Meijer in the Mid-west and HEB in Texas. None are for sale but they are examples of the kind of the companies Tesco should be very interested in.”
But RW Baird analyst Paul Smiddy warned: “The time is not right. Tesco would be too wary of its position compared with Wal-Mart.”
Tesco’s total international sales rose 25.6% to £4.2bn in its first half, driven by stronger growth in central Europe. Like-for-like sales rose 4.4%. It plans to open 164 stores overseas this year. Market share increased in all of its 12 international markets except Taiwan and Malaysia.
Tesco said Malaysia was rapidly improving with very strong sales growth but Taiwan remained “sub-scale”.
Sir Terry declined to confirm reports Tesco was planning to exit the country but added: “If we can’t see a way forward, we would pull out.”
Group sales up 14.1% to £18.8bn; pre-tax profit up 18.7% to £908m
UK sales up 11.1% to £14.6bn; like-for-likes up 6.7% (excl petrol)
Non-food sales in the UK up 13% to £2.8bn
Sales up 18% to £1.6bn; like-for-likes up 4.4% (excl petrol)
Divisional trading profit up 17% to £107m
Food retail sales down £34.1m to £1.8bn; food retail profit up 12.1% to £41.8m