Tesco supermarket announces exit from Turkey

London: Britain’s biggest retailer, supermarket group Tesco, said yesterday it was selling its Turkish business as its international arm focuses on its operations in Central Europe and Southeast Asia.

Tesco, which is slowly turning around its performance after a record annual loss in 2014/15, said in a statement it was offloading also its mainly British restaurant chain, Giraffe, after only three years.

The supermarket giant is selling its 95.5-per cent controlling stake in Turkish business Kipa to rival group Migros.  

The sale, subject to local regulatory approvals, will result in estimated cash proceeds of around £30 million ($43m, 38m euros), contributing to a reduction of around £110m in total debt, Tesco said.

“The sale of Kipa reflects the particular strategic challenge we have faced in Turkey as a small regional player in a highly competitive market,” Tesco chief executive Dave Lewis said in the statement.  

“It removes the need for the sustained investment required to enable the business to compete independently, allowing us to focus on improving profitability in Central Europe and continuing to grow our businesses in Southeast Asia.”

Tesco entered the Turkish market in 2003, growing the business to 170 stores that employ around 9,600 staff, according to its website.

Tesco is selling Giraffe to Boparan Restaurants Holdings Limited for an undisclosed amount.