As Tesco Hungary is closing 13 of its loss-making stores today, a local newspaper claims that dozens more could see their shutters come down for good in August.
According to the Magyar Nemzet newspaper, officials from the grocer’s UK headquarters are currently visiting Tesco stores in Hungary, examining the operation of unprofitable units.
This had never happened before, one of the store managers told the newspaper. Speaking on condition of remaining unnamed, the manager said that nobody knows how things will turn out for the loss-making Tesco stores in Hungary. Those units earmarked for closing, have been unprofitable since their opening, the manager said. He added that most of them opened at a location where the purchasing power of the inhabitants is weak, or more supermarkets are available in the neighbourhood.
Magyar Nemzet was the first to report on the plans regarding divestment of unprofitable Tesco stores, this information was later confirmed by the UK-based grocer, saying that Hungary's biggest supermarket chain and third-biggest employer will close 13 of its units on 4 February.
Now the same newspaper claims that the units to be closed today fell victim to global streamlining at Tesco, and another 31 loss-making stores may be shut in August.
In an interview with Hungarian tabloid Blikk, the retailer’s local CEO said today that the closure of Tesco’s 13 stores was not initiated in the UK. "Tesco is an independent retailer in Hungary. There was no pressure from London, we had to make a decision ourselves," Nigel Jones said.
The units to be closed today are mostly medium-sized and are outside the nation’s capital, they represent about 5 per cent of Tesco’s local network of 222 stores.
© 2015 European Supermarket Magazine – your source for the latest retail news. Article written by László Juhász.
