Tesco to unveil international recovery plan
The retailer is expected to report that underlying sales growth has slowed since Christmas despite investing £1bn to boost Tesco's fortunes in the UK since a shock profits warning a year ago.
Cutting prices and hiring more store staff has so far failed to offset the impact of the horse meat scandal, together with tough competition from discount stores such as Aldi and ongoing difficulties with Tesco's non-food ranges.
"Either it is solving the wrong problem or trying to solve it in the wrong way," said Dave McCarthy, a food retail analyst at Investec. "In reality, Tesco's problems are multidimensional."
Even before the problems with US operations, Fresh & Easy, hit, profits are expected to have fallen by 10% to £3.4bn in the year to February. Revenues are thought to have risen 1.6% to £66.2bn.
A year ago Clarke said Tesco would put the brakes on opening such large stores in the UK as shoppers increasingly choose to buy closer to home rather than pay for the petrol to drive to hypermarkets.
On Wednesday, Clarke is expected to announce similar plans in eastern Europe and other foreign markets where Tesco will put more effort into building online sales and opening small local stores.
Profits in markets such as Hungary, Poland and the Czech Republic have fallen back amid the Europe-wide economic difficulties.
Tesco's sales are also thought to have taken a battering in South Korea after the government brought in new restrictions on trading hours.
Meanwhile, the retailer is turning to independent shopkeepers to help drive its expansion by offering franchise deals on its One Stop chain.
Tesco's concept would in effect work in the same way as other small convenience brands, with independent retailers paying to use the One Stop name, sourcing stock from the parent company and sticking to certain rules on their stores' layout.
A spokeswoman for One Stop, which operates 640 of its own stores, said: "We believe this is a real opportunity and feel there's a gap in the market because we can offer something different to independent retailers."
Source: guardian.co.uk
