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Tesco to shut down four stores in smaller cities (2)

By Zhang Ye (Global Times)

13:25, August 24, 2012

"They should focus on the market in the more mature cities like Beijing and Shanghai," said Wang.

It is not the first time Tesco China has closed stores in less developed cities. In 2010, a Tesco supermarket in Yixing, Jiangsu Province was closed after three years of operation.

"The store was far from the city center and close to a similar local supermarket. We preferred to shop in the local one as the price and goods were similar," a local resident surnamed Yu in Yixing told the Global Times Thursday.

"Tesco's supermarket operation in China has not performed well since the company entered into China's retail industry, forcing it to close unprofitable stores," Fan Jie, a retail analyst from Adfaith Management Consulting, told the Global Times Thursday.

Besides facing difficulties in the retail sector, Tesco also suffered losses from its property business. Tesco China entered the commercial real estate market with its LifeSpace project in 2009 and planned to open 16 LifeSpace malls throughout the nation. However, it decided to pull out of the commercial real estate sector in July due to poor performance and high staff turnover.

Tesco entered China in 2004 and has built up a network of over 100 stores across provinces along the eastern seaboard, according to the company's website.

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