Tesco to exit Japanese market

Published:  19 Jun at 6 PM

The United Kingdom supermarket group Tesco will be exiting Japan in a double-stage process, in which it will first sell off 50 percent of its Tesco Japan subsidiary company to Aeon, the nation’s second-biggest retail group.

Prior to its eventual departure from the business, Tesco plans to invest £40 million in this joint venture. No deadlines for this have yet been made public. The British firm entered Japan back in 2003.

Tesco's CEO Philip Clarke thanked his colleagues in Japan for doing “an excellent job” for the firm, especially in recent months. He said he was very pleased about the deal with Aeon, adding that he was confident that it would produce the best outcome for shareholders, customers in Japan and for staff.

Tesco, which moved into Japan nine years ago, first announced last year that it wanted to sell off its Japanese business. In 2003, the firm entered Japan after acquiring the C2 Network, which owned 78 convenience stores at the time.

Clive Black, who is an analyst with Shore Capital, says the exit from Japan is the elimination of a distraction for the company. However, he added that having to pay for the exit the market was disappointing.