ABSTRACT

European grocery retailers, once the most internationalized players in the global economy, have increasingly disposed of their Chinese subsidiaries since 2010. This paper examines the dynamics of European grocery retail divestment in China between 2010 and 2020. Based on secondary data of company documentation and news reports, we analyse the processes and drivers of these divestments within a holistic framework of foreign divestment in the retail sector. Our findings identify both retail format specific and common factors for European grocery retailers’ divestments. Financial pressure in the home market or other overseas markets, competition from indigenous retailers in physical stores, online retailing and the ‘New Retail’, changing consumer dynamics and growing operational costs are the major drivers of divestment activities. This paper identifies the divestment from China by European grocery retailers as a step in their ongoing de-internationalization process.