Tesco Weighs Sale of Asia Stores

Marco Green
December 9, 2019

Tesco said the review was in its early stages and no decision about a possible sale has been taken. If so, do you have a fond memory you like to share about the supermarket chain?

One of the biggest supermarket chain in the UK, Tesco is planning to sell its Thai and Malaysian stores.

"Tesco confirms that, following inbound interest, it has commenced a review of the strategic options for its businesses in Thailand and Malaysia, including an evaluation of a possible sale of these businesses", it said in a statement on Sunday.

But Thailand has proved particularly challenging for the company in recent times, with bosses blaming "the issuance of government welfare cards" for hitting sales there.

Clive Black, a retail analyst at stockbroker Shore Capital, said the Thai business was "a jewel in Tesco's crown" and any deal would have to "involve substantial monetary sums". In the six months to Aug 24 the businesses together generated sales of 2.56 billion pounds (100 billion baht), up 1% at constant exchange rates from a year earlier, and operating profit of 171 million pounds, up 42.3%. Tesco has said it is targeting rapid expansion in Thailand, with goals to build 750 express stores within three years.

Shares in groceries goliath Tesco (TSCO) moved up 5% to 243.75p on news it has begun a strategic review of its Asia business after receiving an approach for the business from a mystery suitor.

Tesco operates 74 stores in Malaysia and 1967 in Thailand under Tesco Lotus brand.

Previous retreat of 2015 took place when Dave Lewis sold the south Korean business of Tesco.

An analyst at TCC Global, Bryan Roberts says that Tesco's commitment to a global footprint had looked shaky as supermarket chains across the world sold off worldwide parts of their businesses. Murphy, a former executive at healthcare group Walgreens Boots Alliance, has not yet confirmed his start date.

If Tesco does quit Thailand and Malaysia, it will inevitably raise questions over the future of its remaining overseas operations - its loss-making central European division, consisting of stores in Czech Republic, Hungary, Poland and Slovakia.

Other reports by Click Lancashire

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