British Tesco supermarket chain exits Poland for Slovakia
On 18 June 2020, Tesco announced the sale of its business in Poland to Salling Group A / S, which owns Netto stores. The transaction, which is subject to the approval of antitrust authorities, includes 301 stores, distribution centers and head office.
According to Dave Lewis, President of the Tesco Group, the company has seen a significant improvement in the results of our operations in Central Europe, but they still see market challenges in Poland. This transaction will allow Tesco to focus in the region on operations in the Czech Republic, Hungary and Slovakia, where they have a stronger market position and growth opportunities, and achieve margins and financial results that are of value to the Group.
As the Tesco Group informs, the total value of the enterprise determined as part of the transaction is PLN 900 million (equivalent of GBP 181 million), and the total net proceeds are to be approximately PLN 819 million (equivalent to GBP 165 million), in cash. The transaction is expected to be completed in the current financial year. The proceeds from the sale will be used for general corporate purposes.
All 301 stores covered by the transaction will undergo rebranding during the 18-month transition period. Under the contract, about 7,000 Tesco employees will be transferred to the Salling Group.
The transaction must be verified and approved by regulatory authorities.
Tesco has decided to leave the Polish market due to falling revenues, notorious losses and lack of ideas for development on the Polish market. It should be reminded that in 2018/1017 Tesco Polska had revenues of PLN 11.7 billion, in 2018/2019 it fell to PLN 10.5 billion, and in the recently ended 2019/20 the revenue accounted only for PLN 7.1 billion.
Source: portalspozywczy.pl, dlahandlu.pl