Global Update

Tesco forms Malaysian joint venture

Tesco, Britain's leading supermarket chain, plans to open 15 hypermarkets in Malaysia in partnership with local conglomerate Sime Darby. Tesco is investing $220 million in a 70% stake in the venture. The two companies plan to open their first Malaysian store at the end of 2001 in Puchong, Selangor. The timing of later store openings will depend on market conditions and the performance of the business. Tesco will face competition in Malaysia from Carrefour and Ahold, which owns the Tops and Parkson supermarket chains in the country. Tesco already operates 32 hypermarkets in three other countries: Thailand, South Korea and Taiwan. It plans to have 140 hypermarkets in the region by 2005.

Hong Kong Internet grocer folds

The United States is not the only country in which online grocery retailers have run into trouble lately. AdMart, a Hong Kong-based Internet grocer, has closed because of its inability to attract customers. AdMart's chief executive, Anton van Gorp, admits that the basket size of each purchase had not reached the point where the cost of home delivery–free for orders more than $38–was fully covered. AdMart was launched in June 1999 as an online competitor to Hong Kong's established supermarket chains, Wellcome and Park 'n Shop. Its arrival on the territory's retail scene immediately sparked a price war between it and its store-based competitors.Sainsbury's tests secure home delivery

A Sainsbury's supermarket in Twickenham, West London, is testing a new form of home delivery that could revolutionize online shopping in the United Kingdom. The supermarket chain has formed a partnership with Homeport, a company that supplies docking stations fitted with secure containers. The containers are installed outside customers' homes and can only be opened using a special swipe card. In the initial phase of the test, Sainsbury's will only deliver ambient goods to the boxes, but chilled foods could be included later on. Sainsbury's believes the boxes could reduce its delivery time by up to 40%, since delivery trucks will be able to supply one street at the same time by delivering goods to secure boxes outside customers' front doors, rather than returning at different times when customers are home. The Homeport concept is similar to the home-delivery model of Streamline, the Internet grocery that went bankrupt in late 2000, which delivered goods to refrigerators in garages.



Top of Mind 2001 Internationalization will be the priority issue for global food industry executives in 2001, according to the CIES Top of Mind survey of nearly 400 retailers and their suppliers. Global Internet Exchanges such as Transora and WorldWide Retail Exchange have leapt into third position in this year's survey (they were not included last year), while food safety rose to fourth place overall and to first place among supermarket executives—doubtless a reflection of recent fears in Europe over Mad Cow Disease. By contract, ECR and home shopping have both slipped in the rankings this year.

(For more information about CIES–The Food Business Forum, visitwww.ciesnet.com.)