…with over eight million customers every week shopping in 636 stores across Asia.

China

In China, we trade from 47 hypermarkets, mainly in Shanghai, and the first stores in China’s other large regional markets – Guangzhou, Shenzhen and Beijing (our first Tesco-fascia store) – have opened well. Our new range of over 1,000 Tesco own-brand lines have been well-received by customers. Hymall’s sales have continued to grow strongly – up overall by 19% in the year, with strengthening like-for-like sales as the year progressed. As a result of carrying higher overheads as we invest to equip the business to grow faster, it made a small loss after tax and interest, of which our share was £6 million.

Japan

In a still subdued retail market in Japan we made progress, with modest overall sales growth but a stronger like-for-like performance. Our focus in the year has been on refining and developing the trial Express-type stores into a profitable, expandable format and implementing our ‘Tesco in a Box’ suite of operating systems successfully. We now plan to push on with a much larger opening programme of up to 35 new stores this year.

Malaysia

Tesco Malaysia has made excellent progress, moving strongly through to profitability in the year, delivering another year of strong (over 50%) sales growth, and achieving a near-doubling of space helped by the Makro acquisition in January. Substantial refits to the Makro stores have now begun, taking eight to nine weeks per store to complete and involving significant changes to layouts and ranges. We are developing a very good market position in Malaysia with a new store programme in place for this year which will add a further 22% of space to our network.

South Korea

In South Korea, Homeplus continued to do well, with solid sales and very strong profit growth in more challenging market conditions than in recent years. During the year, we opened 29 new stores and, including extensions, almost 1m sq ft of space. Most of our new selling area came from large hypermarkets, but our development programme is now broadly-based with nearly 20% coming from store extensions, 21% from compact hypers and the remainder from the roll-out of our successful Express convenience format, which now has almost 40 stores trading. We have a strong forward pipeline of new space, including plans to double the size of the Express business.

Thailand

Political uncertainty in Thailand during the second half of the year produced an unhelpful business climate. Nevertheless, Tesco Lotus, which has a strong market position, again performed well, delivering good growth in sales and profit. The successful development and roll-out of new small formats continues and to date, we have 370 stores trading across four formats, including 75 hypermarkets (of which 17 are Value stores). We also have 266 Express stores and 29 supermarkets which are proving very popular with customers.

 

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