Tesco has announced that it intends to sell off its Japan business after eight years trying to break into the market.
The firm owns 129 small stores in the Greater Tokyo area, half of which it says are profitable.
"We have concluded that we cannot build a sufficiently scalable business," said chief executive Philip Clarke.
Japan is the smallest of Tesco's 13 international businesses. Analysts said the decision will now shift attention to the firm's loss-making US business.
However, Mr Clarke has vowed to turn around its American Fresh 'n' Easy chain by 2013. More...