Tesco halt development sites to save on cash

Over the last five years, it has been reported that Tesco have abandoned more developments than any of their rivals, having put a stop to 62 of their developments across the country.
Tesco have suffered losses over the last year, as have all the big four stores in the UK. The halting of the development of these 62 sites will help to cut costs for the biggest supermarket chain while it turns the business around, according to figures reported by the Telegraph.
Originally, Dave Lewis, Tesco’s new chief executive, wanted to pull the plug on just 49 sites, but the actual number has exceeded expectations.
Sainsburys has abandoned 12 sites in the same time frame, Morrisons, four, and Asda only two. These numbers are dwarfed by the amount that Tesco have put the brakes on, even when combined.
Michael Dall, economist at ABI, said: “It is indicative of the wider issues within Tesco that they are retrenching from some of their expansion plans. The big four have an advantage because of their size already, but as they shelve stores it provides an opportunity for Aldi and Lidl to move into new areas while they concentrate on other parts of the business.”
More outlets does not always mean more business for stores, a lesson they have learned recently regarding convenience stores. If holding back and consolidating their cash is the way for the big stores to call an end to the price war, then we may soon be seeing improvements to the market.