Tesco: Business hits and misses – BBC News

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Wheelbarrows, cappuccinos and movies – Tesco has invested a lot of money in recent years trying to sell us things other than groceries.

The idea was to get into higher growth business and in some cases, such as cafes and restaurants, open outlets in its own superstores. Tesco also attempted to break into international markets.

Some of the moves were initiated under the leadership of Sir Terry Leahy, who ran Tesco from 1997 to 2011. And a big push came under the following chief executive Philip Clarke.

But Mr Clarke’s tenure ended in shocking losses at the UK grocery business and he was shown the door in 2014.

Since then the new boss Dave Lewis has been jettisoning operations not considered central to Tesco’s business.

Here’s a reminder of Tesco’s past – and current – business experiments.

Giraffe restaurants

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Tesco bought Giraffe restaurants in 2013 for 48.6m. The idea was to get into a high growth business and fill excess space in stores with branches of the family-friendly restaurant.

The chain has lost money, mainly due to the cost of expanding to around 60 stores across the UK. Reports say that Tesco is looking for buyers.

Dobbies Garden Centres

After a lengthy battle, Tesco won full control of Dobbies Garden Centres in 2008, at a cost of around 150m. But last year the company lost 48m and reports say that it’s now up for sale.

Harris and Hoole cafes

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Tesco first bought a stake in the cafe chain, Harris and Hoole, in 2013 and took full control earlier this year. The chain has 43 outlets of which 29 are located in Tesco stores. For the year to 1 March 2015 it lost 21.6m.

There’s speculation that Tesco took full control in order to prepare the business for a possible sale.

Euphorium Bakery

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Tesco first teamed up with Euphorium in 2012 and then invested further in 2013 to help the bakers roll out more stores.

It took full control of the company in March 2015, but there’s speculation that it could be up for sale.

The latest accounts show that it lost almost 34,000 in the year to 1 March 2015.

Fresh & Easy

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Fresh & Easy was opened in the US in 2007 but after five years of losses it was sold in 2013.

Tesco spent around 1bn on the attempt to break into the US market.

Blinkbox Entertainment video streaming service

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In 2011 Tesco bought an 80% stake in the online video shop Blinkbox Entertainment. The business racked up heavy losses and was sold to TalkTalk in January 2015.

Homeplus supermarket chain, South Korea

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Under the leadership of Sir Terry Leahy Tesco invested heavily in Asia. In particular it built up the Homeplus chain in South Korea.

Homeplus became a valuable asset and when Tesco came under pressure to reduce its debt, the business was sold. The sale in September of 2015 raised 4.2bn. Even to Tesco that was a significant sum.

Nutricentre health supplements store

Image copyright TESCO

Tesco first invested in Nutricentre in 2001 with hopes to build a nationwide chain of stores selling vitamins and other health products. But the company never really took off and its most recent accounts for the year to 28 February 2015 show a loss of 8m.

It closed the business last month.

Dunnhumby data business

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Dunnhumby is the operation behind the Tesco clubcard. It collects and analyses data on customers’ shopping habits. Tesco hoped to raise 2bn when it put it up for sale in 2015. But the sale was abandoned later in the year, suggesting that Tesco did not receive any attractive offers.

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Read more: www.bbc.co.uk


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