Tesco is considering selling its central and eastern European operations as Britain’s biggest supermarket group looks to sharpen its focus on the UK and Ireland, according to reports.
The Financial Times reported that Tesco is exploring options for the division, including finding a potential buyer for its businesses in Hungary, the Czech Republic and Slovakia.
A Tesco spokesman declined to comment on the speculation, saying: “We never comment on rumour or speculation.”
A sale would mark another major step away from Tesco’s former ambition of becoming a global retail powerhouse.
Tesco entered Hungary in 1995 as part of an aggressive overseas expansion strategy that saw the supermarket giant build a presence across multiple continents.
However, the group has since scaled back its international ambitions, selling its operations in Thailand and Malaysia for around £8 billion in 2020.
Its mainland European stores are now Tesco’s only significant operations outside Britain and Ireland.
The division currently employs around 22,000 people and operates 56 stores across Hungary, the Czech Republic and Slovakia.
Tesco’s central European operation has continued to perform strongly, with sales rising 0.8 per cent to £1.14 billion in the quarter ending in May.
The wider group has faced a more uncertain trading environment, with Tesco warning of challenges linked to global instability, including the conflict in the Middle East.
Shares in Tesco edged slightly lower following reports of a possible sale.
A potential exit from central and eastern Europe would reinforce Tesco’s strategy of concentrating investment on its core British and Irish markets.
The supermarket giant has spent recent years streamlining its business, cutting back overseas exposure and focusing on competing with rivals including Sainsbury’s, Asda and discount chains.
If a buyer is found, the move would represent the final chapter of Tesco’s long-running international expansion story and a further shift towards a more focused UK retail strategy.
Leave a Comment