Tesco to close its HQ and 43 stores as price wars hot up between multiples
Tesco to close its HQ and 43 stores as price wars hot up between multiples
Tesco is to close its Cheshunt HQ, moving it to Welwyn Garden City and 43 stores despite better than anticipated Christmas sales.
Tesco chief executive Dave Lewis said the company was: “Facing the reality of the situation,” as the firm revealed comparable sales for the three months to the beginning of January were down by 2.9%.
Announcing its third quarter trading statement Sainsbury’s chief executive, Mike Coupe also warned the outlook in the market: “Does remain challenging.” Its like-for-like sales fell by 1.7% in the final three months of 2014.
Tesco currently has 3,300 stores in the UK and the 43 closures are reported to be unprofitable outlets comprising mostly local convenience shops. The company will also close its staff pension scheme, make cuts of £250million and aims to reduce its overheads by 30%.
In a bid to compete with the discounters Sainsbury’s has plans to invest £150 million in the prices of popular products including reductions in its meat and poultry categories. Coupe said: : “The regular price of a Sainsbury’s 1.35kg British whole chicken has fallen from £4.50 to £3.50.”
It is also anticipated the company will be reorganising its supplier deals, scrapping the complex rebate schemes and penalty feeds in favour of a simpler system based on sales volume (see previous story).
Whilst Marks & Spencer reported a dismal Christmas for much of its business chief executive Marc Boland said: “M&S had a very good Christmas in food. We delivered record Christmas sales, strongly outperforming the market.”
