TESCO yesterday announced that it would quit Japan after a bruising eight years in which it failed to gain a profitable foothold in the market.
Japan is known as a difficult market to crack for western companies, especially in the notoriously tough grocery sector.
Tesco has 129 stores, mainly in the Tokyo area, having started with the purchase of two C-Two Network supermarkets in 2003.
In the last financial year like-for-like sales in the country were down by 8.1 per cent.
New Tesco chief executive Philip Clarke admitted the retailer had failed to make its operations in Japan viable. “Having made considerable efforts in Japan, we have concluded that we cannot build a sufficiently scalable business,” he said.
He added that a formal sale process would be launched in the coming months.
It is understood that Goldman Sachs will be advising Tesco on the sale.
French rival Carrefour pulled out of Japan in 2005 having found the market too tough.
Tesco’s performance in the US has also come under the spotlight in recent months, with its loss making Fresh & Easy business struggling to make an imprint.
Clarke, who took over from Sir Terry Leahy in March, has also ordered a shake-up of the company’s clothing business, which he has identified as underperforming.