Tesco taps up bankers to explore Central European business sale

The grocer is working with bankers on its options for a sale of its operations in Hungary, the Czech Republic and Slovakia, according to reporting by the FT.

Any sale would bring down the curtain on Tesco’s retail ambitions outside the UK and Republic of Ireland, which once saw the supermarket giant running businesses across South East Asia, and an attempt to start a new chain from scratch in the United States.

Tesco launched in Hungary in 1995, and is the grocer’s only major operation outside the UK and ROI, with the grocer having sold off most of its one-time international empire in a series of deals since its 2014 accounting scandal.

It sold its South Korean Homeplus business for £4.2bn in 2015 and disposed of its Thai and Malaysian arm for £8bn in 2020.

The retailer had shut its loss-making US Fresh & Easy venture in 2013, costing shareholders more than £1bn.

Tesco said: “We never comment on rumour or speculation”.

The grocery giant has 561 stores across central and Eastern Europe, employing around 22,000 people. Its European division reported £4.5bn in revenues last year but generated just £115m of the group’s £3.2bn adjusted operating profit.

Proceeds from any future sale would likely be used to further boost Tesco’s bid to cut prices in its home market, and invest in new stores, in a bid to retain its dominance of the market.

According to the most recent set of grocery market share data from Worldpanel, Tesco’s market share stands at 28.2% – nearly double its next closest rival, Sainsbury’s, which has a 15.2% share.

Any sale of its central and Eastern European business would represent something of a strategic turnaround for group chief executive Ken Murphy, who said as recently as 2023 that it was “an integral part of the group and a successful part of the group, and they don’t distract us very much from the core business”.