Tesco will breathe easy in India

The London Stock Exchange shows that Tesco shares have consistently been losing in the market since news of their misappropriation of accounts came to light. According to a news released by the LSE, Tesco overestimated its interim profits by £250 million, following which four directors were suspended. Tesco has now rather hurriedly appointed a new Chief Finance Officer, Alan Stewart, who has joined them over from M&S 3 months earlier than the designated start date, as reported by Reuters.

While Tesco continues to feel the heat in the UK, it has something to smile about on the Indian terrain. Earlier this year, in a bid to salvage its weakening business, Tesco joined hands with Trent Hypermarket Limited of the TATA Group to open a chain of stores in the southern and western parts of India. Tesco is the first foreign investor in multi-brand retail in India since the latter eased its foreign investment rules.

Head of Forum for Biotechnology and Food Security, Devinder Sharma, tweeted “While Tesco falls from grace in the UK. India getting ready to welcome it.”

This collaboration comes at an opportune time for both India and Tesco. India is steadily climbing the FDI ladder, thus bringing in more funds for the economy and boosting competition. Tesco, in turn, could turn its financial situation around as the Indian multi-brand market is currently booming owing to greater purchasing power in the hands of the public.

Stockbroker and market expert, Mr. Anil Gugle, says, “Tesco had earlier declined a collaboration offer. After a long time, it agreed to enter the Indian market. Both (Tata and Tesco) have a quid pro quo opportunity. As Tata benefits from the investments, Tesco will benefit from Tata’s rich experience in retail and 3 generations worth of goodwill.”

He added that the Indian consumer is savvier, and at disposal of more plastic money which has changed the definition of India being a seller’s market. The younger generation is not a fervent frequenter of Mom and Pop stores, it wants a wider variety in everything.