For example, does it have too many out-of-town hypermarkets in Europe?Īnd, how does it plan to compete with the growth of discount chains? In Poland, Clarke says Tesco has suffered from the rise of “proximity retail”, with consumers choosing to shop in convenience stores rather than the company’s hypermarkets. However, there are now questions about whether Tesco chose the right strategy in its overseas markets. The retailer’s business in South Korea, which is its biggest outside the UK, has been effected by government restricting Sunday trading hours for large companies, while retailers in Hungary have had to deal with a 2.5pc crisis tax on their revenue. To a certain extent, Clarke and Tesco have also been unlucky.
The slide in Tesco’s overseas profits, which is far larger than analysts expected, is a warning about the health of the global economy, emerging markets in Asia and the prospects for the eurozone.
