Struggling Tesco announce supermarket closures in Hungary

Struggling Tesco announce supermarket closures in Hungary
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Under pressure retail giant Tesco is to close 13 stores in Hungary in an attempt to secure the long term survival of its remaining 209 outlets in the country.

Recent government legislation means loss-making chains must close after two successive years of losses.

Tesco’s CEO Nigel Jones said because of that, “It is absolutely essential that we remain profitable to protect our long term future here.”

The company suffered a devastating 2014 with profit warnings and a plummeting share price.

Five hundred Hungarian employees now face dismissal or relocation and negotiations with trade unions underway.

József Sáling, the president, of the Trade Union of Commercial Employees told us: “Our task, as a trade union, is to protect the employees, to try to find another job for them or a fair outcome if they cannot get another job in another Tesco store.”

Euronews business correspondent in Hungary Beatrix Asboth concluded: “The new rules effect all big retail chains, such as Auchan and Spar as well. For now, they look set to stay in Hungary. Spar reacted to the new situation by cutting investment costs and putting some of its stores into the franchise-system. Tesco has not considered a similar move in the short term.”

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