Talking Tesco: UK Competition Commission

Why are we publishing these comments?

Tesco has been reading with interest the third party comments on the Groceries Market Investigation that the Competition Commission has been publishing on its website. Our formal submissions have addressed many of the issues raised by these comments, particularly those of some of the professional lobbying organisations. However, a number of submissions on the Competition Commission's website contain more specific comments about Tesco which we have not covered in our formal submissions.

Some of these specific comments are inaccurate and misleading, and we are providing a series of short notes in order to put the record straight. In the interests of transparency we are today publishing the first such series of notes.

Consumer No.95 – Fay Harris

Ms Harris raises concerns about the site of a former Tesco store in St Andrew’s Ridge, Swindon. She claims that our store was closed despite hitting its targets, and that we are in no rush to dispose of the property.

Reason for store closure

We only close stores as a last resort. Our store in St Andrew’s Ridge closed in January 2005, after careful consideration, because despite determined efforts to make the store a success people were choosing to do their shopping elsewhere. We can understand Ms Harris’ concern that the property remained empty for some time. Our intention was always to find a tenant as quickly as possible because it is not commercially sensible to continue to pay rent on a vacant property.

Site now sublet to a new tenant

We hope Ms Harris will be pleased to hear that a new tenant will shortly take over the store (we were never in a position to sell the property since we have never taken ownership of it, but have been leasing the property from another party). We exchanged contracts and completed on the sublease for the property on 22 February 2007. The new tenant is a convenience retailer trading as a Costcutter and they indicated an intention to open in April 2007.

We would like to assure Ms Harris that ever since the store closed we have worked hard to find a new tenant for this property. The store closed on 15 January 2005 and we instructed our agents to market the property on our behalf in late January. In mid-February the sales particulars were prepared and dispatched to interested parties and a ‘for sale’ sign was erected. A number of site viewings took place at this stage, although unfortunately none of the parties wished to proceed. We then instructed our agents to roll out a more comprehensive marketing strategy, placing advertisements in trade press and regional media in addition to their own marketing materials.

Rather than assign the lease to a new tenant, the landlord was keen to find someone to sublet the property. There were various expressions of interest in 2005, but these did not result in concrete arrangements. We continued to have discussions with various other parties during 2006, one of which fell through, but as described above our negotiations have now come to fruition and the new tenant is expected to shortly begin trading.