Tesco unloads Japanese business to Aeon
Tesco, the world’s No.3 retailer, has ended a nine-year attempt to crack Japan’s tough retail market by effectively paying Aeon Corp, the country’s No.2 general retailer, to take its loss-making business there off its hands.
The deal, which will allow Tesco to focus on fixing its main British business after a shock profit warning in January, will inevitably re-heat speculation over the group’s long-term commitment to its much larger loss-making Fresh & Easy business in the United States.
Many foreign retailers have struggled in Japan, hampered by fickle consumer tastes, a super-competitive landscape and prolonged, profit-sapping deflation. France’s Carrefour (CARR.PA) and Britain’s Boots ABAQUO.UL are among the firms to have pulled out over the past decade.
The move is also the latest in a series by store groups exiting weaker markets as they struggle with sluggish demand in many developed economies. Carrefour announced a deal on Friday to pull out of Greece.