Tesco will be selling off its 129 small stores in the Greater Tokyo area, only half of which have proven profitable, the BBC reports.

The multinational company's chief executive Philip Clarke said, "We have concluded that we cannot build a sufficiently scalable business."

With attention removed from Japan, the smallest of Tesco's 13 international businesses, the firm will set its sights on turning around its loss-making US business.

Clarke said that business in Japan would continue as usual, until the formal sale process of Tesco's stores begins in coming months.