RetailAnalysis
17 February 2017
Tesco enters Pakistan with private label deal

Tesco has partnered up with local Karachi-based Alpha Supermarket to stock its products in 50 Express convenience stores and four Alpha stores over the next three years.

Exclusive partnership

Alpha Supermarket will be the exclusive partner for Tesco in Pakistan, offering Tesco’s private labels, including Tesco Goodness, Tesco Finest, and Tesco Everyday. It will offer a complete range of Tesco product categories, both food and non-food items, including frozen and fresh foods.

Alpha Supermarket is a modern retailer in Pakistan, known for its customer services and loyalty programmes. It's also one of the first retailers offering online shopping through an ecommerce platform.

Fifty new stores in next three years

Alpha Supermarkets has plans to open 50 Express Stores, stocking Tesco products in the country in the next three years, besides its three flagship stores in Karachi, Lahore and Islamabad. The company has already invested US$2m mainly in its Karachi’s store and it is reported the investments will double in the next coming months.

We intend to leverage this relationship by creating Alpha Express Stores across the country in short order.” said Nadeem Hussain, Chairman of Limestone, owner of Alpha Supermarkets.

Why Pakistan?

Pakistan, with a population of almost 200 million, is Asia's eighth largest grocery market and we forecast the market to grow 8% each year until 2020. Although modern trade is still in its infancy, as it takes off, retailers with first mover advantage will be well placed. Pakistan’s middle class is growing fast and so are 3G services and smart phone penetration that are making the country an attractive market for the retailer.

Tesco's Asia focus

This is an exciting move for Tesco, tapping into Pakistan's fast-growing consumer market without taking too big a risk. The retailer has exited markets such as the US, Japan, South Korea and Turkey in recent history and partnered up with CR Vanguard in China. The move reiterates Tesco's focus on Asia, particularly the sub-continent, where it already has a well-established partnership with Trent Hypermarkets, a Tata business, in India.

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