LONDON (FNS) -- Tesco here plans to open at least 20 stores in Hungary over the next five years.
The expansion strategy is tied to Tesco's $24.3 million purchase of a majority stake in Hungarian food retailer Global last June.
A Tesco spokesman said the company also plans to convert the Global stores it acquired to Tescos. There are 45 Global stores in northwest Hungary covering a total of more than 100,000 square feet of selling space. Tesco said the Global investment represented an inexpensive way to penetrate an underdeveloped market dominated by regional, state-owned chains.
Tesco revealed its plans for the Hungarian market in reporting results for the year ended Feb. 25.
The U.K. food retailer opened its first Hungarian Tesco store -- a 12,300-square-foot unit carrying 7,000 product lines -- in Szombathely, near the Austrian border, in November.
Tesco said its fiscal results were boosted by the first-time inclusions of Global and the Wm. Low chain in Scotland, which it bought in September.
For the year, Tesco recorded earnings of $617.2 million (381 million pounds), up 27.7%. Sales increased 17.6% to $17.6 billion. Currency conversions were made at the rate of one pound equals $1.62.
In the United Kingdom, the company opened 35 stores last year and closed three, leaving 519 Tesco units and 57 Wm. Low stores. Because of tighter U.K. planning regulations, the company expects to open only 24 Tesco units there this year, plus 10 of its new Express units, which are gas station convenience stores, said Sir Ian MacLaurin, chairman. In France, where Tesco owns the Catteau chain, it expects to open only five stores this year, after opening 11 last year.