Tesco Downsizes China Operations; Foreign Retailers Find The Market A Hard Nut To Crack

UK-based Tesco PLC, along with the world’s other leading retailers, is finding out how difficult it is to penetrate China’s retail market. Foreign-owned retailers, including Carrefour SA and Wal-Mart Stores, Inc., began coming in to China in the early 1990s, seeking to grab their shares of the market whose growth is being driven by the rising middle class. Recently, Tesco announced its plan to merge its China operations with the state-owned China Resources Enterprise Ltd. Combining Tesco’s 131 supermarkets, hypermarkets, and shopping malls in China with CRE’s nearly 3,000 stores, the deal marks a major decline in Tesco’s business after nine years of operating independently in the country.