Tesco to shut 43 unprofitable stores and HQ

Under-pressure supermarket Tesco is to close 43 unprofitable stores, as well as shut its head office in Cheshunt in 2016.

The retailer's sales fell 2.9% in the 19 weeks to January 3 and by 0.3% over the six-week Christmas period.

Earlier it announced that it was launching a fightback by cutting prices on hundreds of its products.

Shoppers will see lower prices on household favourites from brands such as Hovis, Marmite and Coca-Cola as the company tries to win back market share from discount rivals such as Aldi and Lidl.

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  1. Chris Choi

Big British retailers face a battle for survival

Tesco is to close 43 stores and its headquarters Credit: PA

This isn't something I'm used to. For years we've reported Tesco expansion. Now it's store closures. Nearly 100 in total either shutting or shelved.

But this story is bigger than that. Today Marks & Spencer also reported poor sales of general merchandise and clothing (though food went very well).

Yesterday Sainsbury's was revealing its own Christmas trading droop.

These big bastions of British retail are taking a bashing. And it comes at a time when they really need to be match-fit for their fight against the newer kids on the shopping block - the likes of Aldi and Lidl.

What next? Shareholders won't like it and profit margins will be under stress but 2015 will bring out the big guns in a supermarket price war that for some retailers could be a battle for survival.

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Tesco CEO welcomes 'improvement' over Christmas

CEO Dave Lewis was upbeat on Tesco's trading performance over the festive performance as sales declines eased Credit: PA

Amid a fall in sales and the announcement of plans to close 43 stores, the new CEO of crisis-hit Tesco remained upbeat on the supermarket's trading performance over the festive performance as sales declines eased.

Like-for-like sales over Christmas fell just 0.3%, compared with a fall of 4.2 in the preceding third quarter.

Dave Lewis paid tribute to the "exceptional job" done by staff and added: "It felt like at Christmas we really brought 'every little helps' to life again."

We are seeing the benefits of listening to our customers. The investments we are making in service, availability and selectively in price are already resulting in a better shopping experience.

A broad-based improvement has built gradually through the third quarter, leading to a strong Christmas trading performance.

– Tesco CEO Dave Lewis

Tesco staff across UK await news on store closures

Tesco is not yet disclosing the locations of the 43 stores to close but Mr Lewis revealed that a "significant proportion" would be Tesco Express convenience shops Credit: PA

The 43 Tesco stores facing closure have not yet been made public but a "significant proportion" will be Tesco Express convenience stores at sites across the country.

New chief executive Dave Lewis has not yet indicated the scale of the job losses at the beleaguered supermarket, with full details set to be known by April.

Employees affected by the closures will be informed over "coming months".

Head office jobs will also see cuts as Tesco cuts overheads by 30%.

Mr Lewis said he understood how the announcement would hit "hard-working people", adding: "I am not immune to the impact of the decisions we have had to take on our colleagues."

Tesco CEO: We have very difficult changes to make

Tesco's new chief executive Dave Lewis acknowledged that the supermarket has "some very difficult changes to make" as it unveiled new measures in a bid to reduce its capital expenditure and cut costs by £250 million a year.

I am very conscious that the consequences of these changes are significant for all stakeholders in our business but we are facing the reality of the situation.

Our recent performance gives us confidence that when we pull together and put the customer first we can deliver the right results.

– Chief executive Dave Lewis

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Tesco: 'Most' of 43 stores to close are Express outlets

Most of the 43 Tesco stores to close will be Express outlets Credit: PA

The 43 unprofitable Tesco stores facing closure are "mostly" Express outlets, the retailer told ITV News.

The supermarket said it would be consulting with store employees affected by the closures "over the coming weeks".

Our performance as a business has fallen significantly short of where we would want it to be and we have had to face up to some very tough decisions, including the closure of 43 unprofitable stores.

Our first priority is to consult colleagues who are impacted by these changes and we will be speaking to them over the coming weeks.

– Tesco spokesman

How Tesco plans to save £250 million a year

Tesco said it would reduce its capital expenditure for next year to £1 billion Credit: PA

Beleaguered supermarket Tesco has unveiled a raft of measures it hopes will turn around its fortunes.

With the company's pension deficit and debt levels growing, Tesco said it would reduce its capital expenditure for next year to £1 billion, from no more than £2.1 billion this year and cut costs by £250 million a year.

Tesco's money-saving plans include:

  • Closing 43 unprofitable stores
  • Closing it final salary pension scheme
  • Shutting its main headquarters in Cheshunt, Hertfordshire, in 2016, moving to Welwyn Garden City
  • Restructuring central overheads to save an estimated £250 million a year
  • A "significant revision" to its store-building programme - with plans for 49 new stores scrapped
  • Selling off Tesco Broadband and UK download business Blinkbox to TalkTalk
  • Exploring options to sell its Dunnhumby data business, as well as cancelling a final-year dividend for 2014/15

Tesco hires Halfords CEO as new UK and Ireland boss

Tesco will close its headquarters in Cheshunt, Hertfordshire, in 2016 Credit: PA

Unveiling a raft of measures, Tesco announced the appointment of Halfords Chief Executive Matt Davies as the new boss of its UK and Ireland business.

The supermarket's new CEO Dave Lewis described him as "an experienced retailer with a proven track record of turning around businesses".

He will take up the position on June 1.

Tesco to shut 43 unprofitable stores and head office

Tesco is to shut 43 unprofitable stores Credit: PA

Tesco is to shut 43 unprofitable stores and close its head office in Cheshunt, Hertfordshire, in 2016, making its base Welwyn Garden City.

The crisis-hit retailer plans to sell assets and cut hundreds of millions of pounds of costs to fund lower prices as it attempts to recover from the biggest crisis in its 95-year-history.

The supermarket is consulting on plans to close its final salary pension scheme.

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