Tesco (LON:TSCO) is planning to shut a raft of city centre stores and convert dozens of others to its new discount chain Jack’s, The Sunday Times has revealed. The move is likely to put thousands of jobs at risk.
Tesco’s share price has been subdued in London this morning, having inched 0.17 percent to 233.90p as of 08:40 BST, marginally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.09 percent lower at 7,297.43 points. The group’s shares have added just under 29 percent to their value over the past year, as compared with about a one-percent gain in the Footsie.
Tesco to shut down stores
Industry insiders told The Sunday Times that Tesco was planning to close up to 30 poorly performing Metro stores and convert a further 60, although the supermarket disputed these numbers. The grocer has reportedly told staff at Metro outlets in parts of Lancashire as well as in Manchester and Liverpool that their stores will be closing.
The move comes ahead of the blue-chip supermarket’s media day in Chatteris, near Cambridge, on Wednesday, when the company is expected to confirm the launch of its new discount chain, as it looks to battle competition from German discounters Aldi and Lidl.
“With its fictitious brands, new discount fascia and a retreat from the high street, Tesco is beginning to look like it has lost confidence in its core brand,” an analyst told The Sunday Times.
Analysts on blue-chip grocer
The 16 analysts offering 12-month price targets for Tesco for the Financial Times have a median target of 275.00p on the shares, with a high estimate of 300.00p and a low estimate of 200.00p. As of September 14, the consensus forecast amongst 21 polled investment analysts covering Britain’s biggest grocer has it that the company will outperform the market.