After selling its operations in Poland in June, Tesco may continue its retaliation from the Central European region by selling its Hungarian business – according to the recent analysis of pro-government daily Magyar Nemzet. The news portal reported that in case the Hungarian supermarkets are sold, they are likely to become majority Hungarian-owned. The British supermarket giant denies the allegations.
According to Magyar Nemzet, recent coronavirus-related losses may force Tesco to sell its Hungarian branch in the near future. They claim that Tesco’s crisis response may come as a result of coronavirus-induced sales taxes that make the Hungarian operations of the British retailer overly costly. The sale of Tesco’s Hungarian business would help the Hungarian government realize its long-term goal of reducing the exposure of the domestic retail market to large multinational corporations.
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These claims come after the sale of all of Tesco’s 301 Polish supermarkets to Danish retail group Salling Group earlier in June. The £181 million deal marked a significant change in the regional operation of the supermarket giant. Right after the sale, Tesco chief executive Dave Lewis said that sale would allow Tesco ‘to focus on the region of our business in Czech Republic, Hungary, and Slovakia, where we have stronger market positions.’
As reflected by Lewis’ statement, Tesco denies allegations that it is planning to leave the Hungarian market. According to Tesco Chairman John Allan, while Tesco has experienced problems in Poland, it continues to be a market leader in Hungary, the Czech Republic, and Slovakia and it is planning to continue investing in both physical and online retail operations.
Featured photo illustration by János Vajda/MTI.