Europe's retailers going home - FT.com Like sunburned tourists grumbling that the local food's not quite right, Europe's retailers are drifting home from their overseas adventures. Germany's Metro said on Wednesday that it sees no future for its electronics stores in China. Last year it sold its Makro business in the UK for £140m, and its Real hypermarkets in eastern Europe for €1.1bn. Carrefour of France is also pulling back - businesses in Indonesia, Malaysia, Colombia and Singapore have been sold or closed in the past year. And the UK's Tesco is to put an end to its struggling US business. The retailers say that it is time to focus on core markets and exit businesses where they lack scale. That should be good for returns. Return on capital at all three companies is lower now than it was five years ago, according to data from Capital IQ. Carrefour, for example, generated a return on capital of 15 per cent five years ago. Based on figures for the first half of the year, that could have fallen to 9 per cent in 2012. The drawback is that by cutting their overseas exposure, retailers will be more reliant on mature markets at home. About half of Metro's revenues came from Germany a decade ago, but that has now fallen to some 37 per cent. The proportion has also fallen at Carrefour and Tesco. But trading updates over the past week have highlighted just how tough those home markets are - Metro said that German sales in its cash and carry business fell in 2012, while Tesco's decent Christmas sales performance is likely to have come at the expense of margins. Overseas expansion was an answer to the question of where growth would come from. Cutting back that expansion leaves the question still hanging. If Tesco, Metro and Carrefour are going to deploy less capital in some of their overseas businesses, they need to explain what they will do with it instead.