UK-based international grocery and general merchandising chain TESCO is planning to develop a wholesale cash-and-carry business in India.The wholesale outlets will be started in Mumbai initially and it will supply fresh food,grocery and non-food items to retailers,business owners and restaurants.

According to the law of the country,Foreign Direct Investment or FDI is restricted only in the form of wholesale sellers and the retail customers can be reached via franchisees and licencees.Therefore,TESCO signed an exclusive franchise agreement with the retail arm of the Tata Group which is known as Trent.

The CEO of TESCO Sir Terry Leahy was quoted to have said, “ Our agreement will enable us to share our global retail expertise, supporting Trent in the development of their Star Bazaar hypermarket business.”
Trent MD Noel N Tata reciprocated by saying, ”Our ability to access TESCO’s retail knowledge and expertise will play an important role in our endeavour to offer a unique shopping experience to customers across the country. Their wholesale cash-and-carry business will provide us with the opportunity to tap into a world class supply chain.”

While Trent has paved the way for TESCO’s entry into the country,it is banking on Tesco’s expertise and know-how to develop its hypermarket business ‘Star Bazar’.Star bazar will carry merchandise supplied by TESCO.The initial investment of TESCO is estimated around £60 million in the first two years which amounts to Rs 480 crores.