PRESS RELEASE
4th August 2015
(Written by Ashley Armstrong - The Telegraph)
Tesco abandons three times as many supermarkets as its rivals
Tesco has abandoned three times as many new supermarket sites as all of its rivals put together over
the last five years in a fresh sign that the “space race” is over.
The grocer has slammed the brakes on 62 development sites across the country over the period as
part of its efforts to cut costs while it struggles to turn the business around, according to figures
compiled by Barbour ABI exclusively for The Telegraph.
The Tesco figure is considerably higher than the 49 original sites that chief executive Dave Lewis
announced in January he was to jettison, as part of his overhaul of the supermarket giant. Mr Lewis
also said at the time that Tesco would, as part of his radical shake-up, stores in a move that put
2,000 jobs at risk.
The number of abandoned stores is more than four times the highest figure of Tesco’s “Big Four”
rivals: Sainsbury’s has abandoned 13 supermarket sites; Morrisons four; and Asda just two over the
same period - a total of 19 against Tesco’s 62.
“It is indicative of the wider issues within Tesco that they are retrenching from some of their
expansion plans”, said Michael Dall, economist at ABI. “The Big Four have an advantage because of
their size already, but as they shelve stores it provides an opportunity for Aldi and Lidl to move into
new areas while they concentrate on other parts of the business”, he added.
German discounters Aldi and Lidl have submitted 428 new build applications between them over
the same time frame and have abandoned just four as they carry on expanding, Mr Dall added.
Senior grocery industry sources said that the development and opening of a new supermarket site
was a laborious, lengthy process, involving complex planning applications and frequent appeals by
local councils, particularly around the promises to improve communities and infrastructure.
Mr Lewis’ predecessor, Phil Clarke, had attempted to steer Tesco away from its rampant expansion
programme by stopping the construction of big new supermarkets, as shopping habits saw
customers shift away from trips to out-of-town mega supermarkets towards more frequent shops at
convenience stores.
In April, Tesco delivered one of the biggest annual losses in British corporate history after suffering a
£4.7bn write-down on the value of its supermarket estate.
“Tesco was more aggressive in the race for space than its rivals”, said Ian Anderson, senior director
of planning at CBRE. “Because of the market conditions at the moment the abandoned sites are now
presenting an opportunity to rivals and other developers who might turn them into mixed
development complexes which could alleviate the housing crisis in some areas”, he added.
In April, Tesco was forced to pay a £9m settlement to two local councils after shelving plans for a
new store in Bridgwater in Somerset. The supermarket chain has come under fire particularly for
abandoning a new supermarket plan in Kirkby, Liverpool.
“We regularly review our property development plans,” said a Tesco spokesman. “In January 2015
we announced we would not proceed with 49 planned new store developments across the UK. We
are working with local authorities to find appropriate alternative uses for sites and consider all
options.”
ENDSNotes to editors:
Press enquiries to:
Jonathan Touhey at Barbour ABI
e: [email protected]
t: 0151 353 3605
About Barbour ABI:
Barbour ABI is a leading provider of construction intelligence services. With a team of in-house
research specialists and a dedicated lead economist, it provides commercially relevant insight and
unique analysis of trends and developments within the building and construction industry.
Barbour ABI is the chosen provider of Construction New Orders data to the Office for National
Statistics and the Government’s Construction and Infrastructure Pipeline, outlining future
construction and infrastructure projects where public funding is agreed. Barbour ABI also provides
data for independent organisations, such as the Construction Products Association.
Barbour ABI is part of global events-led marketing services and communications company, UBM, and
is headquartered in Cheshire Oaks, Cheshire.