British Retailer Tesco Aims to Pair Groceries, Service Stations in Thailand.

Aug. 3--Tesco Lotus is moving to boost its growing dominance in the Thai retailing market beyond superstore operations to the downstream levels -- grocery and convenience stores.

The move is signalled by an agreement between the giant British retailer and the Thai unit of ExxonMobil Corp to create Tesco Lotus Express convenience stores at Esso service stations.

The tie-in between Tesco Lotus and Esso Thailand is breaking new ground in Thailand's competitive retailing market which has intensified over the past few years following the rapid expansion of superstores including the likes of Tesco and Carrefour of France.

To the dismay of smaller local retailers, Tesco Lotus is operating 28 superstores in Thailand and will open four additional ones later this year. It plans to open an average of five to seven new sites every year.

Tesco and ExxonMobil, meanwhile, are expanding a concept that was successfully tested in the UK six years ago. There are more than 40 Tesco Express stores at Esso petrol stations in the UK.

The first Tesco Lotus Express convenience store in Thailand is due to open at Esso service station, at Km 6.5 on Ram Intra road, on Bangkok's northern outskirts in early October.

It will have retail space of 300 square metres. It will be followed by three or four "pilot" Esso sites later this year.