Belfast Telegraph

Struggling Tesco scraps plans for two superstores

By Margaret Canning

Supermarket giant Tesco reversed nearly two decades of continuous expansion in Northern Ireland as it dropped plans for two stores in Carryduff and Armagh.

The company, which has operated in here since 1996, has suffered a drastic reversal of fortunes thanks to declining sales and a £263m accounting mis-statement.

As a result, it is abandoning plans for multi-million investments across the UK with planned stores in Carryduff and Armagh among those mothballed.

It will also close 43 existing stores.

The new superstore in Armagh is close to being finished and is expected to be sold, possibly to a rival supermarket.

It's understood abandoned Tesco developments in other parts of the UK have been sold on to retailer Sports Direct.

The smaller Carryduff development was given planning permission though building work has not started.

Company chief executive Dave Lewis, said: "It is with a heavy heart that I am announcing that we are unable to proceed with our planned new store developments in Armagh and Carryduff.

"Our performance as a business has fallen significantly short of where we would want it to be and my absolute imperative has to be to protect the future of our business for the circa 300,000 colleagues we employ in communities all over the UK.

"I know that this news will be a real disappointment to many people in Northern Ireland and we're extremely grateful for the support we've received for our plans.

"I am very aware of the importance of these sites and I am determined that we will work closely with the respective councils to find the right solutions for both Armagh and Carryduff."

The company would not give the locations of the 43 stores which are to be shut but Mr Lewis did say Tesco Express shops were likely to be a focus of closures.

There are around 18 Express stores in Northern Ireland and up to 10 Tesco Extra stores - including a newly-opened superstore in Tesco's Bridgewater Park.

Tesco has splurged on Tesco Express stores in Belfast in particular, paying around £1m for student bar The Elms in south Belfast with a view to turning it into a convenience store.

In Armagh, there was some discussion that the area had not been in need of a Tesco development.

The area has well-established independent grocers, as well as Lidl, Sainsbury's and an M&S Simply Food. Last year independent town centre retailer Emersons announced a £2m expansion.

Reacting to Tesco's withdrawal yesterday, Gavin Emerson said: "When any of the big supermarket giants move into a town there is always a fear how it will impact on local people and local businesses.

"We remain confident, however, that our investment in the city's high street will draw out of town shoppers back into the city centre as we enhance our customer experience.

"We believe in creating a sustainable future which will continue to create jobs, put life back to the high street and make shopping for your groceries easy again."

Tesco is also following many of the biggest companies in closing its final salary pension scheme. It will also move away from its headquarters in Cheshunt, Essex.

However, like-for-like sales over the key Christmas period fell by just 0.3% - better than predicted by industry experts.

Background

Tesco has had a torrid time, suffering from nearly two years of falling sales and the acute embarrassment of exaggerating its profits by £263m last year.  It has now unveiled a drastic plan of store closures and redundancies to stop the rot.

It's not yet clear yet if any of its nearly 60 existing stores in Northern Ireland will be closed but it has cancelled plans for the planned new stores in Armagh and Carryduff.

Belfast Telegraph

Popular