INDIA: FDI will benefit retail sector - Tesco CFO
More overseas investment would benefit India's retail sector, Tesco CFO Laurie McIlwee insisted today (8 December).
McIlwee said the Indian government's decision to put on hold its plans to ease restrictions on foreign ownership in the country's retail industry will be to the detriment of consumers.
"It's probably a missed opportunity for customers, given the challenges of retail and supply chain in India. There's a lot of know-how around the world about how to run multi-brand retail and the likes of ourselves, Carrefour and Wal-Mart have got something to offer," McIlwee told just-style's sister publication, just-food.
Yesterday, India's ruling Congress Party confirmed that plans to reform the country's retail sector had been suspended amid fierce opposition from some local politicians and retailers.
Finance Minister Pranab Mukherjee said the move to allow overseas investors to own 51% of multi-brand retail outlets would not be implemented until "a consensus is developed through consultation among various stakeholders".
The Indian government claimed the reforms would create jobs and modernise the country's supply chain. Opponents, however, say that allowing the likes of Wal-Mart Stores, Carrefour and Tesco to have greater access to India's retail market would put local retailers out of business.
McIlwee indicated that there would have been little change to Tesco's strategy in India even if the reforms were pushed through. Tesco runs cash-and-carry outlets with its local partner Tata Group, the Indian conglomerate. The UK retailer also operates Tata's Star Bazaar multi-brand stores for the Indian company on a franchise basis.
"Frankly there probably wouldn't have been much of a difference in terms of our strategy in India with or without FDI," McIlwee said. "There are multi-brand outlets that Tesco runs - Star Bazaar. We're the franchisee that runs those stores. There would have been more of those."
The Tesco finance chief said it was "impossible to tell" whether the reforms would go through. "This initiative has come forward so many times and has got very close to the line and not crossed it and even now crossed the line and gone back across it. We're just focusing on running our business in India as it is."
As consumer confidence remains stagnant, retailers have embraced the upcoming Jubilee celebrations and Olympics in the hope that the celebratory spirit will loosen consumers' wallets. Will the Jubilee...
Just-style attended the Retail Week Supply Chain Summit, which brought together a number of key supply chain executives to consider some of the greatest challenges facing the sector. Here are some of ...
Shares in Wal-Mart de Mexico y Centroamerica plummeted this week as allegations the company bribed officials to speed up store openings prompted many shareholders to offload the stock at a rate of kno...
Wal-Mart's Indian division has reportedly appointed a team in India to brief employees on its anti-corruption compliance programme....
Top stories on just-style this week include analysts' views on M&S reporting a 0.2% rise in clothing sales during its first quarter, American Eagle Outfitters looking to sell off part or all of its ch...
Leading global brands and retailers including H&M, Levi Strauss, Carrefour and Tesco have backed a three-year programme to clean up production in the Bangladeshi garment industry....
French retail giant Carrefour has sped up its transition to a new CEO, with Georges Plassat taking over the role a month early....
- Myanmar - right time, right place, new challenges
- 3D printing gears up for fashion industry change
- Apparel working conditions linked to profit
- Cutting pollution saves China textile mills money
- Adidas worker hotline bridges communication gap
- China cotton imports to rise as Xinjiang cuts crop
- Crystal first China licensee of RevoLaze tech
- Thailand project to vertically integrate clothing
- Cambodia growth to slow on competition and cost
- Dick's Sporting Goods updates on strategy