Troubled Dobbies to be sold as Tesco returns to profit
Tesco is selling its Dobbies Garden Centre chain after notching up a £162m profit following a record £6.3bn loss just a year ago.
Despite the retailer turning the corner, one expert said it still faced challenges that could result in further store closure across Great Britain and Northern Ireland.
While Tesco saw its market share in Northern Ireland shrink slightly in the past few months - partly due to the rise of discounters such as Lidl, it reported a bottom-line pre-tax profit of £162m for the year to February 27, against losses of £6.3bn the previous year, and posted its first quarterly UK sales growth for three years.
There are around 55 Tesco stores of varying sizes across Northern Ireland.
But as part of its trading update, Tesco revealed it was drawing up plans to sell its loss-making chain of garden centres, Dobbies, including a branch is Lisburn.
Tesco praised the "significant progress" in its turnaround as it returned to full-year profit.
It also reported a 0.9% rise in UK like-for-like sales in its fourth quarter, which marked its first full quarter of growth since 2013, as the group's recovery under boss Dave Lewis gathers pace.
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But Tesco could offload more of its stock - a year after it put a freeze on new stores opening in Northern Ireland the rest of the UK - and shut outlets, according Donald McFetridge, retail analyst with the Ulster University.
"Part of that planning includes nationally and internationally rationalising their estate and store portfolio," he said. "In a market which has become increasingly saturated and which is becoming more and more reliant on the discounters, there are still plenty of fresh challenges ahead for Tesco.
"At home, the company will no doubt be carrying out a careful examination and analysis of their store portfolio in the UK and this could lead - in my opinion - to some store closures here."
Mr McFetridge also claimed that in some parts of Northern Ireland, Tesco was "cannibalising" its market share by having outlets too close together.
But he added that once the business was streamlined, the company could examine opening new outlets here at some point in the future.
Tesco boss Dave Lewis said the business had made "significant progress against the priorities we set out in October 2014".