Communities hit as Tesco drops 49 store projects

On Richard Carr’s commercial and residential blog today, he looks at the effects Tesco’s plans to drop nearly 50 store projects could have on local communities.

Retailer pulls the plug

Tesco’s plan to drop close to 50 store projects comes after the grocer announced that profits for its financial year are likely to be under £1.4 billion – down 60% on £3.3 billion the year previous.

Richard Carr Tesco

Tesco has dropped plans to build 50 new stores

Many of the sites that Tesco had secured had come at a premium price and they were often up against bitter fights with community groups and traders to secure them.

However, the developments would have created 100s of jobs across the country and provided construction firms with plenty of work.

The sites are now likely to be sold at a loss by the firm’s property arm who will try and get planning permission for housing estates on as many plots as possible.

Projects were planned in regeneration schemes across the country

A large number of the 49 abandoned projects were due to anchor redevelopment and regeneration schemes across the UK. Communities in Kent, Wolverhampton and in the Black Country will be affected.

Dave Lewis, Tesco’s Chief Executive, explained that building the stores wouldn’t be financial viable for the company.

“Let me be clear, these 49 sites are sites which were for big stores. And some of these projects have been around for a very long time and they were around for a very long time because it can take a while to build up the parcel of land to be able to build a big store.

“But actually when you look at those stores, when you look at the environment, you look at the market, you look at the capacity and you look at the economics, and by the way you then look at the capital I would need to be able to build them out and you say ‘that’s not a very sensible thing for us to do.”

A full list of all the affect areas within the UK can be found on the planningportal.gov.uk site.

Expect other supermarkets to follow suit

In response to Tesco’s plans, Richard Carr said that he found the whole Supermarket demise very odd. We’re talking about some of the largest companies in the world and there are say 65 million people in this country according to the government, surely they knew that you cannot just keep building more and more superstores!

Or are they to blame for the ‘obesity’ crisis by force feeding us, no I do not think so, it was just ridiculous when you sit and consider the facts!

And then they go and build hundreds of ‘Local’ stores to change the whole of the UK’s shopping habits, me and my family included. So we no longer need to go and fill a trolley, empty a trolley at the check-out onto the conveyor belt, fill a trolley once you have bagged it, empty a trolley into the boot of your car, then yet again carry it to the kitchen, then empty the bags onto your shelves and the fridge, then three days later throw 15% of what you bought, goes in the bin as it is out of date, and human nature is greedy so we always used to by too much!

What a great business model and it worked, so what bright spark trashed that habit, as I can tell you we as a family have not been on a weekly shop for at least 18 months.

Why would we, two deliveries a week by internet and the occasional quick trip into the ‘Local’ store, surely someone saw this coming down the tracks, but it will take a brave man to fix it.

Lastly we hear of Tesco’s plans to close 40-45 stores and I believe we will see a lot more of this in the future. In 20 years there will be no ‘Superstores’ just another casualty of the internet.

There is one thing that may rescue the ‘Superstore’ mundane process, you wonder around and just touch a product button and it is ready in bags at the door, no more trolleys just a touchy feely experience, but then this should have been sorted years ago.

 

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