British retailer Tesco once planned to take the number of its hypermarkets to more than 200 in China in 2010.

However, it seems that even in 2012, the hypermarket and supermarket operator won’t be able to achieve that goal. It has quietly scaled down its expansion plans for China after disappointments by poor sales and ongoing difficulties competing projects.

“Tesco has ebbed and flowed in China. There has been more ebbing than flowing,” Clive Black, an analyst at Shore Capital, told the Financial Times newspaper.

In the year to February 2012, Tesco is estimated to have lost around £50 million (US$78 million) in China, according to Black.

“If China remains lossmaking for the foreseeable future I think investors will put pressure on Tesco to reduce investment and potentially withdraw,” said Black.

Notable losses have been observed in Tesco’s store in Qingdao, which according to a sales assistant, has been closed for the past year, except for a few days during Chinese New Year.

Internationally, Tesco is also facing a headwind created by its lossmaking US business and restrictions on opening hours in South Korea.

Philip Clarke, Tesco CEO, said Tesco remains committed to the Chinese market. It is planning to set up convenience stores and online grocery stores next year.

GB