Tesco bids on Plus Discount in Czech Republic

Tesco has made a bid to pay €200 million for the 144 Plus Discount supermarkets now owned by Germany's retail group Tengelmann in the Czech Republic. If the bid is approved, it would make Britain’s biggest supermarket the largest grocery retailer in the Central European country and hand Tesco its first convenience stores in the Czech market.

The bid is understood to have been the highest in an auction that has also drawn interest from Penny Market, Interspar and Schwarz, which operates Lidl. Tesco runs 93 stores in the Czech Republic. All of its stores in the country are either hypermarkets or supermarkets. The group has built up its Czech business through an asset swap with Carrefour, its French rival, and the acquisition of 27 stores from Edeka, of Germany.

Tesco has started to put more emphasis on its overseas potential after growing controversy over its strength in the UK. The group pockets £1 in nearly every £7 spent on the British high street and commands a 31.5% share of the grocery sector.

The Plus bid falls in line with Tesco CEO, Sir Terry Leahy’s stated ambition of seeing Tesco’s international arm generate half the group’s overall revenue within the next five to ten years. Sir Terry has made little secret of his frustration at the Competition Commission’s ongoing investigation into competition in the market given Tesco’s price battles with Asda. He said that 80% of all new space opened next year would be overseas.