Tesco food chief exits
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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.
Questions & Answers
Q.What is the significance of Michael Holmes' departure from Tesco?
What is the significance of Michael Holmes' departure from Tesco?
Analysts are interpreting his exit, as the head of Tesco's food division, as an admission that the in-store restaurant and cafe concepts he oversaw had failed.
Q.Which specific restaurant and cafe concepts were affected by this development?
Which specific restaurant and cafe concepts were affected by this development?
The concepts included Giraffe restaurants, Harris + Hoole cafe chains, Euphorium bakeries, and Decks, an in-store restaurant created by Tesco itself.
Q.What was the financial performance of Harris + Hoole mentioned in the article?
What was the financial performance of Harris + Hoole mentioned in the article?
Harris + Hoole reportedly lost £13 million in the year to February 2014. Giraffe is also understood to have been booking losses.
Q.What was the initial strategy behind introducing these in-store concepts?
What was the initial strategy behind introducing these in-store concepts?
They were part of former CEO Philip Clarke’s strategy to draw customers back to Tesco stores, particularly larger supermarket locations in the UK.
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