Overview
Tesco is understood to be exploring options for its Central and Eastern European operations, a move reported on July 8. The company has not issued a comment regarding the report.
Financial scale and profitability
Morgan Stanley has outlined the trading and profit profile of the division. Sales for the unit total £4.6 billion while EBIT stands at £115 million, which equates to 6.3% of Tesco’s group sales and 3.6% of group EBIT respectively, according to the bank's analysis.
At the country level the operations are distributed roughly evenly across three markets: Hungary (£1.62 billion of sales), Slovakia (£1.45 billion) and Czechia (£1.56 billion). Across those three countries the business operates 561 stores and employs more than 22,000 people.
Market position and competitive context
Market-share measures from Euromonitor place Tesco as the number four retailer in both Czechia and Hungary and number three in Slovakia. The company has experienced market-share declines over three-, five- and ten-year horizons. In Czechia the leading operator, Schwarz Group, is about 4.4 times the size of Tesco by the measure referenced.
Profitability trend and margins
The division recorded £264 million of EBITDA in fiscal year 2026. Morgan Stanley highlights that this represents under-performance relative to earlier years when EBITDA exceeded £300 million in fiscal years 2022 and 2023. On an operating margin basis, EBIT for the business is about 2.5% of sales, down from a prior peak above 4.3%.
Balance-sheet items relevant to valuation
Tesco’s annual report as of February 2026 estimates the property value of the stores at approximately £1.8 billion, compared with a net book value of £1.4 billion. That difference implies an embedded property revaluation surplus of roughly £400 million. Separately, Morgan Stanley estimates IFRS16 lease liabilities tied to the business at about £680 million.
Comparable transactions
Recent deals in the Central and Eastern European grocery market suggest transaction multiples have fallen in a range between 5 times and 7 times EV/EBITDA. Two transactions referenced by market commentary include Ahold Delhaize’s 2023 acquisition of Profi Rom at approximately 7 times EV/EBITDA on a post-synergy basis, and Carrefour’s disposal of its Romania business at an EV/EBITDA of about 6.5 times.
What the record shows
The public details available consist of the figures and positions set out above: sales and profit contributions, country-level breakdowns, store counts and employment, historical EBITDA comparisons and property and lease-balance-sheet metrics. Tesco has not made a public statement on the reported strategic review.