Schwarz Group poised to bid for Tesco European stores

Schwarz Group, the parent company of Lidl, is expected to submit a bid for Tesco’s operations in the Czech Republic and Slovakia. The move follows reports that the British supermarket chain is actively seeking buyers for its central European businesses as part of a broader strategic retreat from the continent. This potential acquisition would see the German discount retailer expand its footprint in key central European markets.

Tesco intends to divest its entire European division outside the United Kingdom and Ireland. These operations generated revenue of £4.5bn and adjusted profit of £115m in the previous year. The group currently manages 566 stores across the region, comprising 200 locations in Hungary, 184 in the Czech Republic and 182 in Slovakia. Other prospective bidders include the Dutch supermarket chain Ahold Delhaize and the Polish discounter Biedronka, according to the Financial Times.

The sale would mark a significant shift in Tesco’s strategy, as chief executive Ken Murphy previously described these markets as an integral part of the group. However, the company recently wrote down the value of one Slovakian store by £75m, citing intense local competition. This divestiture adds to a long list of markets from which Tesco has withdrawn over the past 15 years, including France, Japan, Malaysia, Poland, South Korea, Thailand, Turkey and the United States. Meanwhile, Lidl has increased its share of the UK grocery market to over eight per cent, positioning it as the sixth largest retailer and close to surpassing Morrisons.