Tesco is to close 13 stores in Hungary in a bid to secure the long-term profitability of its local operations.
The beleaguered supermarket is in recovery mode after a devastating year marked by profit warnings, high-profile departures and a plummeting share price which fell to its lowest point for a decade.
Tesco still has over 200 stores in Hungary, where it has operated since 1995 and has grown to be its third-largest employer, serving 3m customers.
Major retailers in Hungary face new legislation in the country that would enforce the closure of loss-making chains after two successive years of losses, as well as rises in food inspection costs.
A Tesco spokesperson said in a statement:
To secure the long-term future and profitability of our Hungarian business for our customers and colleagues, we have taken the difficult decision to close 13 stores.We remain committed to our business in Hungary and to our customers. We are proud of our ongoing contribution to the Hungarian economy and look forward to continuing to serve our three million customers through our existing stores.Our first priority is to work with our colleagues in the affected stores and to do everything we can to find them alternative roles in Tesco.
In the UK, Tesco is to close 43 unprofitable stores and cut capital expenditure by £1bn as part of its cost-cutting drive.
Tesco's share prices has remained relatively flat this morning, growing just 0.45 per cent on the news.