Tesco Shocks with Store Opening U-turn
By Laura Elliott.
UK market leader Tesco has shocked analysts and rivals alike by taking the so-far “unprecedented” step of halting advanced plans to open more UK stores this financial year. The supermarket giant said that it was instead going to focus on improving its existing estate alongside the opening of smaller outlets.
In April this year, the retailer released plans for a £1 billion investment to turn around its performance in the home market. This followed the chain’s shock profit warning in January and a consistent fall in underlying sales for the previous three quarters.
This major change in the chain’s expenditure has seen the company put a halt to advanced discussions with developers to open stores in at least 10 locations around the country. Tesco’s rivals have called the U-turn “unprecedented” in the wake of years of expansion.
As reported by The Independent, a spokesperson for Tesco said that “As we said in April, we will continue to open new space for customers in all formats from Extras to Express, including major new developments in Woolwich, Gateshead and Streatham. It is right that we discuss plans with local authorities first and we won’t comment on speculation about individual developments.”
At present, Tesco is set to cut the amount of space it opens across the UK by 38% to only 1.5 million square feet this financial year.
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