Tesco: 66 points for Dave Lewis – No.27 – Tesco HomePlus

Today is 40 (forty) days until Dave Lewis takes the helm at the UK’s biggest retailer. Grocery Insight are counting down to the start of his reign with an improvement point per day. Due to the growing nature of the list causing issues with our template, please click on Tesco to see all the posts containing the 66 ‘to do’ points. Today we consider Tesco Homeplus.

A relatively short blog here, as to my chargrin, I’ve never set foot in a Tesco HomePlus due to their location and a time where I may have has long since past. These are pure non food affairs.

There is an estate of 12 HomePlus stores within Tesco selling non food, H&B and small amounts of food. Essentially a Tesco version of Asda Living, albeit without such a strong clothing offer.

Store sales average £180k a week which isn’t too bad but the return on sq.ft is poor, some of these stores are large c.40,000 sq ft affairs so the numbers don’t particularly add up. The boon for non-food is over with a space reduction underway in main stores, introducing concessionary chains and looking to reduce the exposure on non food generally.

Does HomePlus have a place? At those sales rates, probably not. It doesn’t tie in with the strategy of the business with regard to focussing on food first and non food returns are falling given the focus on click / collect and online.

So for Dave Lewis, does he continue with the HomePlus format? Expand them into food in some respects? Or pull out completely as its non core?

There isn’t a long term future in the format, it is unlikely to be expanded beyond 12 stores. Asda have found that with Living, so I think this is one Dave Lewis may call time on.

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Grocery Insight provide market insight on the UK sector with a focus on individual retailers such as Tesco. This insight is useful to various stakeholders and due to my store based focus. Insight can be delivered to suppliers to focus on growth opportunities, analysts and investors to assess the business performance and long term outlook and retailers themselves to assess best practice. 

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