Tesco’s New Concept to Put Pressure on Department Stores
By George Anderson
Harrods need not be concerned but Debenhams, Marks and Spencer and others may have a new and formidable competitor in the form of a new department store concept from Tesco.
According to a report by the Financial Times, Tesco is looking for large, multi-level locations in town centers to open a new format that will sell apparel, consumer electronics, jewelry and housewares in addition to groceries. Consumers would be able to move between floors using “travelators” equipped to handle shopping carts.
The new department store concept seems a next step from Tesco’s Extra hypermarket format. According to the Financial Times, the retailer currently operates 150 Extra stores in the U.K. and is looking to add more.
Jonathan Pritchard, analyst at Oriel Securities, said, “Flexing the Extra model for town centers was clearly going to be the next development in the format, and just when you thought it was safe in the high street waters the biggest shark is on the prowl again.”
While one marketing document obtained by the Financial Times described the town center stores as a “whole new concept,” the company said it is “not a new format.”
Discussion Question: Is opening a department store a logical next step for retailers operating hypermarket or supercenter formats? Do you see multi-floor town center locations becoming increasingly important for big box retailers that primarily operate single-floor standalone stores?
- Tesco plans high street outlets to take on department store chains – Financial Times
- Tesco plans department store rivals – PropertyWeek.com