Tesco to close its first China store

Tesco is to close its first store in China in Shanghai's Changning district on Sept 21, after 15 years of operation, when the "lease expires", the retailer said in an announcement.

The store has posted excellent profits in the past years but to close it is part of the company's strategic shift, reported China Business News on Tuesday, citing sources at Tesco China.

Analysts said retailers are facing increasing operation pressures alongside fast-rising rents.

Tesco closed four stores in China in 2012. In early 2013, a store on Shanghai's Zhenning road was also closed.

In August, Tesco and China Resources, the largest retailer in China's mainland, signed a memorandum of understanding to merge their hypermarket business on the mainland.

China Resources will hold 80 percent of shares while Tesco will hold 20 percent, reported CBN.