Tesco has scrapped 24-hour opening at two large stores, and other shops with low numbers of nightime shoppers may soon follow suit in an attempt to cut costs. As part of efforts by the chief executive, Dave Lewis, to restore the group’s fortunes, Tesco has decided to shut one Extra outlet and one superstore at night because not enough customers were using them. The supermarkets will now close at midnight and reopen at 6am.
The company declined to disclose the stores’ locations while staff were being consulted. It insisted, however, that there would be a “limited” impact on jobs, as other night operations – restacking shelves and picking goods for online deliveries – will go on as usual.
The Grocer reported that other large stores will also cut their nighttime opening hours, but Tesco said no decision had been taken yet. A spokeswoman said: “We’re always thinking about how to best serve customers in each of our stores. Where there is a case to look at the opening hours of a store, we will do so, but any decisions will be made locally and our colleagues will be the first to know.”
About 400 of the supermarket group’s UK stores open around the clock. Britain’s biggest retailer added that 24-hour opening was important for many of its customers.
Nick Bubb, an independent retail analyst, said: “There is some demand for 24-hour shopping, for example from shift workers, but Tesco hypermarkets may not be best sited to meet that demand … and there is always online as an alternative.”
Maureen Hinton, of retail analysts Conlumino, said: “It makes sense to close underused 24 hour stores in the middle of the night. All retailers are looking at their productivity and having a huge store open for a handful of customers does not make economic sense – especially with rising employment costs. And if it is underused then it will not be missed by customers.”
Tesco’s oversized out-of-town supermarkets were once regarded as the grocer’s prime asset. However, the economics of selling food have changed along with shopping habits, with customers buying more online and from small local shops. The company has shut 43 large stores and cancelled plans for 49 others.
Lewis, nicknamed “Drastic Dave” for his cost-cutting while at his previous employer, Unilever, was parachuted into Tesco just over a year ago after a series of profit warnings and an accounting scandal. During his first year at Tesco, he has sought to revive sales by adding extra staff to the shop floor and cutting prices. A new marketing campaign is planned for this autumn.
Several assets have been sold, including Tesco’s Korean business, Homeplus, and the Blinkbox video streaming service. Dunnhumby, the company behind the Tesco Clubcard, has also been put up for sale in an effort to raise cash.
