In a bid to improve the long-term profits of its local operations, Tesco has made the decision to shut down 13 of the stores it holds within Hungary.
The chain is currently going through a period of recovery after going through a year which has been beset by high-profile departures, a declining share price and profit warnings.
The group still operates 200 stores within Hungary. It commenced operations within the country during 1995 and has since grown to be the third-biggest employer, with three million customers.
Large retailers based in Hungary are set to face new legislation which enforces the closure of chains showing losses for two consecutive years. They are also facing increases in food inspection costs.
A Tesco spokesperson said that the decision to shut down 13 stores has been made in a bid to secure the long-term profitability and future of their business for their customers and colleagues. The group remains committed to their customers and business in Hungary and are proud of their continued contribution to the economy of the country. They look forward to continued service to their three million customers via their existing stores.
Tesco’s top priority is to work with people in the stores that are affected and plan to do everything they can to find alternative employment within the group for them.
Tesco is set to close 43 UK stores which have become unprofitable. It is planning to cut its capital expenditure by £1bn during its cost-cutting period.
The share price of Tesco remains fairly flat during this morning’s trading and has grown a mere 0.45% after the release of this latest news.