Tesco has put its loss-making Japanese business up for sale, abandoning an eight-year attempt to break into a tough retail market and underscoring its new boss's commitment to investor returns.
The supermarket group said it would trigger a sale process in the coming months for its 129 small-format Japanese stores in the greater Tokyo area.
"Having made considerable efforts in Japan, we have concluded that we cannot build a sufficiently scalable business," Chief Executive Phil Clarke said.
"We have decided to sell our operations there and focus on our larger businesses in the region, in line with our priority of driving growth and improving returns."
Japan is the smallest of Tesco's 13 international businesses and analysts have long suspected the group would pull out of the country.
Some have also urged Tesco, which trails France's Carrefour (CARR.PA) and industry leader Wal-Mart (WMT.N) by annual sales, to abandon its loss-making U.S. business.
However Clarke, who took over from longstanding CEO Terry Leahy in March, has said he is committed to a plan aimed at driving that business into profit by the end of fiscal 2012-3.
Tesco, the world's third largest retailer, said over half of its Japanese stores were profitable.