Tesco tests waters in Pakistan with Alpha Supermarkets tie-up

By Mehreen Zahra-Malik

ISLAMABAD (Reuters) - Britain's biggest retailer Tesco (TSCO.L) will stock its products at a Pakistani supermarket chain, a Tesco official said on Thursday, dipping its toes in a country of nearly 200 million with rising consumer spending and a growing middle class.

Tesco has been expanding rapidly in emerging markets to bolster sluggish growth in western Europe and is among a growing band of companies attracted by Pakistan's fast-growing consumer market, encouraged by the highest economic growth since 2008 and improved security.

"We have agreed on a wholesale partnership with Alpha Supermarkets in Pakistan, under which Tesco products will be stocked at two of its stores," Jared Lebel, head of new market development at Tesco, told Reuters.

He said that Limestone Private Limited, which owns the Alpha Superstores chain, planned to open 50 smaller express stores and four Alpha stores stocking Tesco products within the next three years.

"We are excited about Pakistan as a market," Lebel said. "A big factor in coming to Pakistan is rising consumer spending."

A spokesman for Tesco in London said: "We're looking forward to seeing how customers respond."

Fauzia Khuhro, head of business development at Limestone, told Reuters that Tesco products would hit its shelves in about 10 days.

"Alpha Supermarkets will be the only retailer in Pakistan that stocks Tesco private-label products," Khuhro said. "We will offer a complete range of Tesco product categories, from food and non-food items to frozen and fresh foods."

Tesco's partnership with Alpha Supermarkets was announced by British High Commissioner Thomas Drew and Limestone at a press briefing in Karachi on Tuesday.

(Additional reporting by Alistair Smout in London; Editing by David Goodman)