Leahy urges emerging world to support chains

Sir Terry Leahy on Wednesday kicked off the inaugural World Retail Congress in Barcelona by calling on politicians in emerging economies to liberalise their markets more quickly, as he acknowledged that the rise of India and China were transforming the retail industry.

The chief executive of Tesco, the world’s fifth-biggest grocer, insisted in a speech that globalisation was a ”democratising force, because it puts more choices in the hands of the many” and called on governments to embrace global chains.

”Around the world, there is still often an instinct for governments to defend entrenched interests rather than to allow new markets entrants to compete fairly. ’Economic patriotism’ is just a fancy way of saying ’protectionism’ - and protectionism is always bad for consumers,” he said.

Sir Terry’s comments come after a difficult period for Tesco in Thailand after a military coup there late last year led to restrictions for the retailer’s expansion plans in what is one of its most successful overseas markets. The chain was forced to temporarily halt the expansion of its chain of small convenience stores in the country following the new government’s decision to draft new laws for this sector of the market.

In India, Tesco is working hard behind the scenes to find a domestic partner because foreign multi-brand retailers entering the country - a category which also includes Carrefour, Tesco, Metro, Kingfisher - are not allowed to own and operate outlets in the country, effectively forcing them to them to partner with domestic businesses. Tesco nearly signed a deal with Bharti Enterprises last year, but lost out to Wal-Mart, the world´s biggest chain.

The retailing opportunity in the world’s big emerging economies - particularly China, India and Russia - is set to be a big theme of the conference, with large numbers of delegates hailing from these countries, and many of the sessions devoted to the topic.