A not-so-little piece of home in Thailand

In case any of you have been missing me over the last two weeks I am back now from my holiday and it already feels like a distant memory. As I mentioned a couple of weeks ago, I was in Singapore visiting the Zephus analysts based there and then I went on holiday to Thailand. I promise I am not writing this to make you all jealous but it does tie in with the topic of my blog today – Tesco.

Back in early July stories started circulating about the possible auction of Carrefour’s South East Asian assets – i.e. their stores in Singapore, Malaysia and Thailand. At the time I noticed the story but it didn’t pique my interest for the simple reason that the ongoing world domination of supermarkets by Tesco to me just means the possibility of reduced choice as a shopper wherever I am in the world. Yes I was aware of Carrefour, having spent time in Singapore I know the group and had visited one of its stores there on a number of occasions.

However, what I hadn’t foreseen was that when I landed on my Thai island some 5000+ miles away from my home and the Tesco superstore about 1 mile away from me in the UK, was that I would be faced with the option of buying some provisions from two giant Tesco Lotus stores already in situ on the island. I am afraid to say that curiosity did get the better of me and I embarked on a “compare and contrast” expedition between Tesco Lotus in Koh Samui and Tesco Extra in Manchester.

Apart from the language on the packaging and some rather more exotic fish and vegetable options there really was no substantial difference between the two stores.
Therefore it was interesting to read today that Tesco initially underbid in the auction for Carrefour’s Asian assets and has been given the opportunity to submit a further bid with retail analysts convinced that Tesco and Carrefour are the best fit. Given that Tesco is already a market leader in the region if it were to win this auction this might be one of the few deals where good enough synergies and economies of scale exist between acquiror and target to offer increased shareholder value to Tesco’s shareholders.

Whilst this may be good news for Tesco shareholders, the idea of nipping from the picturesque beaches of Thailand over the road to a Tesco isn’t my idea of paradise.