Tesco PLC: Europe's Answer to WalMart - And Buffett's $2B Bet

| About: Tesco PLC (TSCDY)

Although little known by U.S.consumers,Tesco (OTCPK:TSCDY) is one of the most powerful retail brand names on the planet.

Tesco is not only the largest British retailer but also the fourth-largest retailer in the world, behind Wal-Mart (NYSE:WMT), Carrefour (NASDAQ:CA) of France, and The Home Depot (NYSE:HD). Tesco is a behemoth that generated almost $80 billion in sales and just under $5 billion in net profit last year.That still makes it significantly smaller than the $312 billion in revenue generated by Wal-Mart in twice as many stores. But Tesco's market share of 31.7% in the United Kingdom would make Wal-Mart turn green with envy. Across all categories,over £1 in every £8 of U.K.retail sales is spent at Tesco.

Tesco is also a huge international player,with its global operations accounting over 25% of its total revenue last year. Tesco currently operates in a wide range of markets including the Czech Republic, Hungary, Japan, Malaysia, Poland, Republic of Ireland, Slovakia,South Korea, Thailand,Turkey and the United Kingdom.The company boasts a total of 3,263 stores — 1,998 stores in the United Kingdom and 1275 stores in its international operations. At the end of its last financial year, Tesco had over 400,000 staff, including 16,400 employees,working in a joint venture in China.

Tesco recently entered the most competitive market in the world, the United States, creating a whole new brand "Fresh & Easy" for its U.S. venture. Tesco plans to spend $500 million a year opening a network of at least 150 convenience stores on the West Coast. CEO Sir Terry Leahy recently told The Times of London in an interview that Tesco's expansion into the United States was just part of a "pretty ambitious" worldwide growth program which may include India and Russia.

No wonder that Tesco is also one of Warren Buffett's top overseas bets. Last year Buffett increased his stake in Tesco to 2.9%, easily making him one of the top 10 shareholders in this global giant. That makes his current stake worth well over $2 billion.

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