Tesco closures prompted by discount rivals
DISCOUNT rivals Aldi and Lidl could be the reason that supermarket giant Tesco decided to shut 43 of its stores.
The retail group announced earlier this month that it was closing unprofitable branches across the UK, and yesterday revealed which stores it had singled out.
Of the 43 listed, 74 per cent are within two miles of an Aldi or Lidl while 24 of the shops are within the same distance of at least two discount competitors.
One of the stores earmarked for closure, the Liverpool Kensington Tesco Express, is surrounded by competition, with three Aldis and two Lidls within two miles of the store.
Clive Black, analyst at Shore Capital, noted that of the 43 stores that are closing, six are Home Plus stores, meaning they are non-grocery stores. “These have been eclipsed by online shopping and we expected these to close,” said Black.
“In terms of the others, most are Expresses and Metros and it is fair to say that Aldi and Lidl are part of the mix that made them uneconomic,” he added.
“They are not the only reason but they are an important part for why they are closing.”
Tesco declined to comment on whether proximity to cheaper rivals was a factor in deciding to shut the stores.
When he announced the closures, Dave Lewis, Tesco chief executive, said the move would help to halve capital spending and save £250m a year.
In total, Tesco is closing 18 Express, 12 Metro, and six Homeplus stores, along with seven superstores. The north west of England is the region which will lose the highest number of Tesco branches, with seven shops closing. Four Tesco Express stores are set to shut in Greater London. Shares in Tesco fell by 0.29 per cent yesterday.
See cityam.com/tescomap for an interactive map of the Tesco closures