Retail giant Tesco has announced plans to sell off its Japanese operation, signalling the end of its eight-year attempt to gain a foothold in the country's retail market.
Chief executive Philip Clarke confirmed in a statement that Tesco no longer felt it could establish a "sufficiently scalable business" in Japan. The supermarket chain, which owns 129 outlets in the Greater Tokyo area, is now understood to be concentrating on expanding its loss-making Fresh ‘n’ Easy division in the US.
"Tesco joins a long list of Western retailers who didn't make it [in Japan]," one equity analyst told BBC News. "They saw no clear line of sight to achieving a market-leading position there. But in the US, they do."
Mr Clarke said that Tesco’s Japanese shops will continue to operate as normal for the time being, ahead of a formal sale process which will take place at some point over the next few months. The group entered the Japanese market with the acquisition of C2 Network in 2003, but has struggled to make headway against rivals.
Last week, Tesco board director Andrew Higginson – who oversaw the firm’s move into the financial sector – resigned citing a desire to seek a new challenge.
