Tesco pulls out of Poland due to 'market challenges'

Tesco thas today pulled out of Poland, selling its business to Danish retail giant Salling Group.

The £181 million deal includes the sale of 301 stores and a head office.

Chief executive Dave Lewis admitted the company had struggled to make progress in the country.

Dave Lewis, Chief Executive of Tesco, 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 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."

Tesco Polska made sales of £1.4 billion last year and an operating loss of £24 million.

Over the past 18 months Tesco has been looking to exit Poland, having sold or agreed to sell a further 22 stores for net proceeds of approximately £200 million and is looking to sell a further 19 stores currently not trading.

In April Tesco warned any coronavirus shopping boost would be "largely offset" by extra costs.

The company did however commit to return £5 billion to shareholders from the proceeds of its £8.2 billion sale of its Thai and Malaysian businesses.

There will be big changes at the top of the company in the coming months, with Lewis set to step down at the end of the summer.

Meanwhile finance head Alan Stewart has decided to retire as chief financial officer in April next year.