Tesco is exploring a sale of its central and eastern European operations in a move that would bring down the curtain on a three-decade attempt by the UK’s biggest supermarket to build a global retail empire.The grocer is working with bankers on its options for its operations in Hungary, the Czech Republic and Slovakia, which employ more than 22,000 people, according to people close to the situation.A sale of the business would end Tesco’s ambitions outside the UK and Ireland, which included an ill-fated attempt to build a new supermarket chain from scratch in the US.The central and eastern European business, launched in Hungary in 1995, is Tesco’s only remaining sizeable operation outside the UK and Ireland, after it sold off most of its international empire in a series of deals since a 2014 accounting scandal.The sell-off included the £4.2 billion (€5 billion) disposal of its South Korean Homeplus business in 2015 followed by the £8 billion sale of its Thailand and Malaysia unit in 2020. Tesco, whose international presence once extended from China to Turkey and Poland, had already shut its loss-making US Fresh & Easy venture in 2013, costing shareholders more than £1 billion.Tesco said: “We never comment on rumour or speculation.”[ Tesco grows like-for-like sales in Ireland by 3.3% to €967mOpens in new window ]The proceeds from a sale of the remaining European operations would further boost Tesco’s firepower to cut prices in its home market, where it is already investing in new stores, to retain its dominance.Asda and Morrisons are still trying to claw back market share lost in the wake of the takeovers by their respective private equity owners, while discounters Aldi and Lidl control close to 20 per cent of the market.Tesco has 561 stores across Hungary, the Czech Republic and Slovakia, according to its latest annual report. Its European division reported £4.5bn of revenues last year but generated only £115 million of the group’s £3.2 billion in adjusted operating profit. Tesco reported group revenues of £66.6 billion.The retailer has restructured large parts of its business in the region in response to growing pressure from discounters, including Aldi and Lidl, and a shift in shopping habits that has hit its large out-of-town stores.The 9 per cent VAT rate has been welcomed by restaurants but does the hospitality sector actually need it? Listen | 39:12In its recent annual report, Tesco said profit in its Eastern operations had fallen as a result of increased competition in Slovakia and rising regulatory pressure, as it wrote down the value of its stores by £75 million.A sale of the European operations would be a strategic about-turn. Ken Murphy, Tesco chief executive, said in 2023 that the business was “an integral part of the group and a successful part of the group, and they don’t distract us very much from the core business”.Tesco had briefly considered selling the division more than a decade ago when former chief Sir Dave Lewis oversaw a range of asset sales to stabilise the group’s finances after an accounting scandal that triggered a collapse in profits.In the early 2000s, Tesco had become a sprawling global operation with diverse interests that included its own Hudl tablet computer device, the Giraffe restaurant chain and the Harris & Hoole coffee business.Murphy, who took over in 2020, has overseen a doubling in Tesco’s share price with the grocer now valued at £29.6 billion and trading at about 468p a share – above where it was valued before the accounting scandal, which resulted in a £129mn settlement with the UK’s Serious Fraud Office.The supermarket has also achieved its highest UK market share in more than a decade as it has focused on building customer loyalty through Clubcard promotions and price-match schemes. Tesco is now harvesting enormous amounts of data from UK consumers via Clubcard, which it sells to advertisers on an anonymised basis.The retailer has said it plans to invest more in technology while also increasing share buy-backs. It returned £700 million to shareholders following the sale of its banking operations to Barclays in 2024. – Copyright The Financial Times Limited 2026