Tesco have sold their Polish supermarket division for £181m to allow the supermarket giant to focus on businesses in Hungary, Slovakia and the Czech Republic.
Salling Group who are now the new owners will now control 301 stores across Poland adding to the company’s portfolio in Germany and Denmark.
Chief executive Dave Lewis is to leave Tesco later this year said, “We have seen significant progress in our business in Central Europe but continue to see market challenges in Poland.
“Today’s announcement allows us to focus in the region on our business in the Czech Republic, Hungary and Slovakia, where we have stronger market positions with good growth prospects and achieve margins, cashflows and returns which are accretive to the Group.”
Amisha Chohan, Equity Research Analyst at Quilter Cheviot said, “Tesco’s Poland business had been struggling for a number of years in a challenging market.
“The sale allows management to re-focus on core markets including the Czech Republic, Hungary and Slovakia, where they have stronger market positions with good growth prospects and can achieve margins, cashflows and returns which are accretive to the Group.
“Tesco’s transformation from a recovery play into a growth play is not currently reflected in its share price – we therefore believe it warrants a re-rating. Post Covid-19, Tesco will benefit from higher sales from the Booker wholesale business, general merchandise and clothing, all with significantly higher margins.”
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