Suffolk/Essex: New Tesco stores to go ahead despite profits fall
- Credit: Archant
RETAIL giant Tesco is pressing ahead with proposals to build large new stores in Suffolk and north Essex despite yesterday’s profits fall, the EADT can reveal.
The company said 100 proposed new large stores across the country would be shelved after its profits halved – but later a spokesman said stores planned for Ipswich, Hadleigh, Felixstowe and Manningtree would not be affected.
He said the schemes that were being shelved were at an earlier stage of development: “It is certainly our intention to press ahead with our planned developments in your area at this time,” he said.
Proposals for the new Tesco stores have all proved controversial.
The company has been trying to build a store in Hadleigh since 1998 – and is still hoping to persuade Babergh council to give it the go-ahead.
Proposals for stores at Walton Green, Felixstowe, and at Manningtree have also proved very controversial.
However the concern about Grafton Way in Ipswich is different – the organisation representing town centre businesses wants Tesco to press on and develop the site without further delay.
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The future of the developments was thrown into question when Tesco’s annual report showed that the company’s apparently unstoppable growth had been halted.
It said it was scrapping more than 100 store developments that had been in the pipeline in the UK, leaving it with a write-down of £804 million on land bought at the height of the property boom.
The group said the days of snapping up land and building major stores that led to its success in the 1990s were now behind it as shoppers are increasingly buying online.
Chief executive Philip Clarke said: “The large stores we have are great and we are doing a lot of work to make them more vibrant and relevant for today’s customers, but we won’t need many more of them because growth in future will be multichannel – a combination of big stores, local convenience stores and online.”
It announced the move as it reported its first annual profits fall in nearly 20 years, down 51.5% to £1.96 billion, hit by slowing sales growth.
Tesco also revealed a £1.2 billion hit from its failed foray in America, confirming plans to offload its Fresh & Easy business in the US were “well advanced” with interest from buyers for all or parts of the business. On an underlying basis, pre-tax profits fell 14.5% to £3.5 billion.