Tesco plans to respond to changing consumer habits by building fewer large stores and using some of the space saved to build more homes.
The supermarket giant has set out plans for 4,000 new homes, mainly at sites in Welwyn Garden City and St Albans, with developments also planned in the north and west of England.
A company spokesman said: "We have decided to reduce the amount of new store space we build each year, building fewer large stores. Where we no longer intend to develop sites, we sell them, lease them or develop them for housing."
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