Tesco is considering selling its operations in the Czech Republic, Slovakia and Hungary, according to a report by the Financial Times.

The British supermarket group is reportedly holding discussions with bankers about a possible sale of its Central European business as it looks to sharpen its focus on the UK market.

Tesco declined to comment on the report, saying it does not respond to market speculation.

A sale would affect a business employing around 22,000 people across the three countries. More than 10,000 employees work in the Czech Republic alone, making Tesco one of the country’s largest private-sector employers.

Tesco entered the Hungarian market in 1995 before expanding into the Czech Republic and Slovakia the following year. Since then, it has built one of the region’s largest retail networks. According to its latest annual report, the company operates 561 stores across the three countries.

Despite its size, the Central European business contributes only a small share of Tesco’s overall earnings.

The company’s European division generated £4.5 billion (around CZK 128 billion) in revenue during the last financial year, while adjusted operating profit reached £115 million. By comparison, Tesco’s total group sales stood at £66.6 billion, with adjusted operating profit of £3.2 billion.

In recent years, Tesco has reshaped its business across the region as discount retailers such as Aldi and Lidl expanded their market share. The company has also adapted to changing consumer habits, with shoppers increasingly moving away from large hypermarkets on the outskirts of cities.

The Financial Times noted that selling the Central European business would represent a major change in Tesco’s strategy. In 2023, chief executive Ken Murphy described the division as an important and successful part of the group.

However, the company has explored a sale before. More than a decade ago, Tesco reviewed similar options while recovering from an accounting scandal that severely damaged its financial performance.

According to the Financial Times, proceeds from any sale could give Tesco additional resources to invest in lower prices and store expansion in the UK, where it continues to compete with rivals including Asda and Morrisons.

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