Supermarket giant Tesco looks set to ramp up its expansion plans during the next six months, but contractors may have to start travelling farther afield if they want to secure a piece of the action.
The retailer this week announced that its capital expenditure had hit £1.6 billion for the six months to 29 August.
Insisting that it would meet its projected targets of £3.5bn for its full 2009/10 year, Tesco indicated that it would now outlay as much as £1.9bn during the coming half-year.
Chief executive Sir Terry Leahy said he believed the UK economy was through its “low point”. He remained confident the company would refit or develop a total of 185,000 sq m of space in the UK for the year, but said that most of the work would continue to come from Tesco’s international arms.
Sir Terry said: “Although we have slowed the pace of expansion in some markets, recognising the severity of the current economic conditions, we still plan to open more than 550,000 sq m of new space in our international [division] this year, and have good plans in place for further growth next year and beyond.”
He suggested the Asian markets, particularly China and India, would be a significant focus for the group’s future expansion.
The group claimed that while plans for new wholesale cashandcarry stores in India were still in the early stages, it expected to roll out a series of new projects from early next year. It is understood the first sites will be developed in Mumbai, Delhi and Bangalore.
Recession-hit nations across Europe have proved a mixed bag for the retailer, with some markets hit harder than others.
Tesco said that it was progressing well with its store re-fit and redevelopment programmes in some countries, including the Czech Republic, while in Turkey it had been forced to slow its rate of expansion due to the severity of the economic conditions.
Tesco last year brought its total number of stores in the UK to 2,282. It completed 87 new stores, including the 1,000th Express store, during the first six months and is “on track” for completion of 185,000 sq m for its 2009/10 year.
Meanwhile, its US brand Fresh & Easy now has 126 stores, and the group plans to open a new outlet every week this year.
Tesco said it was “laying the foundations for long-term growth” in China.