Tesco undeterred by ‘challenges’ in Turkey

Tesco undeterred by ‘challenges’ in Turkey

Tesco undeterred by ‘challenges’ in Turkey

British retailer Tesco controls Turkish supermarket chain Kipa. AP photo

Supermarket giant Tesco, Britain’s biggest retailer, said Turkey maintains its attractiveness despite the challenges in the local market amid tough conditions in the global business.

“Our business in Turkey has been affected by strong competition and our relative exposure to large store formats...We have also closed nine loss-making stores, helping to stabilise trading losses. Despite these actions, Turkey remains a focus,” the company said in its earnings statement.

“We have focused the business on its heartland around Izmir and have seen a gradual improvement in like-for-like sales over the year,” the firm said.

Tesco announced a second drop running in underlying annual profits yesterday as it hopes that recent expansion into India and China can offset weakness in Europe.

The company, the world’s third-biggest supermarket group, said its trading profit dropped 6.0 percent to 3.31 billion ($5.54 billion, 4.0 billion euros) in the year to late February, compared with its performance in 2012/13.

“Our performance in the (last) year was not where we had planned it to be,” Tesco said.

“In the U.K., we faced a weaker and increasingly competitive market in the second half,” said the group, which added that it had faced “difficult trading conditions” elsewhere in Europe.

Tesco has been reportedly seeking options to cut its exposure to Turkish market as well, considering several options regarding its shares in Turkish retailer Kipa. In February, Tesco Kipa had said its parent company Tesco was in the first stages of talks with various companies regarding various options.