Wednesday 23 September 2026 1:42 pm

Every Lidl helps: German grocer’s owner poised to snap up Tesco stores

Tesco shares have reacted positively to the retailer's latest update. — Tesco is seeking to offload its European subsidiary

The owners of Lidl are among the front runners to snap up dozens of Tesco stores as the British supermarket chain seeks to offload some of its biggest subsidiaries.

Schwarz Group is expected to submit an offer for Tesco’s Czech and Slovakian businesses, according to the Financial Times, after the FTSE 100 firm said it was seeking buyers amid a retreat from European markets.

Tesco is planning to offload its entire European division outside the UK and Ireland, which together generated £4.5bn in revenue and £115m in adjusted profit last year. The grocer operates 566 stores in central Europe, according to its most recent financial report, including 200 in Hungary, 184 in the Czech Republic and 182 in Slovakia.

Dutch supermarket chain Ahold Delhaize and Polish discounter Biedronka are also planning to table bids, according to the FT.

The sale would add the Czech republic and Slovakia to a long list of markets from which Tesco has retreated over the past 15 years, including France, Japan, Malaysia, Poland, South Korea, Thailand, Turkey and the US.

Slovakia write-down

Tesco wrote down the value of one of its Slovakian stores by £75m, noting the challenges posed by the “competitive intensity” of this market.

The potential sale of its European operations would be a significant about-turn for Tesco, with chief executive Ken Murphy previously describing the business as “an integral part of the group”.

The firm’s operations in Hungary, the Czech Republic and Slovakia are “a successful part of the group, and they don’t distract us very much from the core business,” Murphy said in 2023.

Tesco holds a commanding 28.2 per cent share of the UK’s grocery market, more than double that of its nearest competitors combined, Sainsbury’s and Asda.

But Lidl’s share of the UK market has rocketed over the past decade. The grocery chain now commands a more than an eight per cent share, making it the sixth largest in the UK, and within touching distance of eclipsing 127-year-old British chain Morrisons.