Tesco buys C Two-Network

Tesco has entered one of the world's toughest retail markets by paying GBP139m for a Japanese supermarket group, C Two-Network. Tesco has been looking to open outlets in Japan since 2000, but was keen to secure a low-cost entry. International retailers have a patchy record at cracking the world's second-largest food retail market, worth over GBP230bn. Carrefour initially spent an estimated E50m a year building hypermarkets, and Wal-Mart invested in a chain of large, but loss-making, stores. C Two is a chain of 78 small, but profitable, supermarkets, enjoying margins of 7 per cent - better than Tesco generates in the UK. IC VIEW The deal looks sensibly cautious. But can Tesco be as successful in Japan as it has been in the rest of Asia? It'll be tough, although the supermarket giant's track record overseas is impressive. Good value.