UK supermarket group Tesco is considering selling its Central and Eastern European business, a move that would mark the end of a 30-year presence in the region, the Financial Times (FT) reported, citing unnamed sources.
The report stated that the company is working with banking advisers to consider options for its Hungarian, Czech and Slovak operations, which together employ more than 22,000 staff.
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A sale of the business would cease Tesco’s ambitions outside the UK and Ireland, which included an earlier, unsuccessful attempt to establish a new supermarket chain from scratch in the US.
Tesco entered Hungary in 1995, and the region remains its only substantial business outside the UK and Ireland following a string of international disposals since the accounting scandal that hit the company in 2014.
Those disposals included the £4.2bn ($5.63bn) sale of its South Korean Homeplus chain in 2015 and the £8bn sale of its operations in Thailand and Malaysia in 2020.
The company had earlier closed its loss-making Fresh & Easy business in the US in 2013, a venture that cost shareholders more than £1bn.
According to its most recent annual report, Tesco currently runs 561 stores across Hungary, the Czech Republic and Slovakia.
The European arm brought in £4.5bn in revenue over the past year but contributed just £115mn to the group’s adjusted operating profit of £3.15bn, out of total group revenues of £66.58bn.
The company has been restructuring significant parts of its regional business amid mounting competition from discount chains such as Aldi and Lidl, as well as changing consumer habits that have affected demand for its larger out-of-town stores.
The FT reported that proceeds from any sale of the remaining European business could strengthen Tesco’s ability to cut prices in the UK market, where it is already expanding its store network to defend its market-leading position.
Tesco told FT: “We never comment on rumour or speculation”.
The company has previously indicated plans to increase technology investment alongside higher shareholder returns through share buybacks.
It returned £700m to shareholders following the sale of its banking division to Barclays in 2024.
Retail Insight Network has contacted Tesco for a comment.
