General
Tesco’s in-store restaurant and cafe concepts may be doomed after the man heading the division exited the company this week.
Analysts are interpreting the departure of Michael Holmes, who headed the Tesco food division, as an admission the concepts had failed.
Giraffe restaurants and Harris + Hoole cafe chains were opened in a number of larger Tesco supermarkets in the UK as part of former CEO Philip Clarke’s strategy to draw customers back to its stores. Holmes also oversaw Euphorium bakeries and Decks, an in-store restaurant created by Tesco.
The grocer paid £50 million to buy Giraffe and took a strategic stake in Harris + Hoole. Harris + Hoole reportedly lost £13 million in the year to February 2014 and Giraffe is understood to have also been booking losses.
Critics of the former Tesco CEO have long said the company should be focusing its investment on cutting prices and improving product quality, focusing on the core grocery business instead of such initiatives like in-store cafes and restaurants.
