Opening new stores
Serving more customers and communities
At Tesco we are committed to serving new and existing customers. We are also committed to being good neighbours in the communities that we serve. We do this by opening stores that bring fresh, affordable, quality food and greater choice to more people, especially for families and pensioners on low incomes.
We have worked hard at developing a business model where ‘everyone is welcome’ – we are able to serve all types of communities with our different ranges from Value to Finest foods, and with our different formats from large to small. This means that we have been able to open stores in areas where other operators would not choose to go.
Through our Tesco Regeneration Partnerships we also open new stores that help to revitalise communities where the lack of economic opportunity has led to a range of social problems and a lack of investment from outside. Over the last seven years our Tesco Regeneration Partnerships have created almost 4,000 jobs, including 2,200 among the long-term unemployed and disabled as well as affordable housing and improved local transport links.
In one of our most recent regeneration partnerships in Liverpool, we opened a new superstore on a disused army barracks. This has provided 167 new jobs, including 85 jobs among the long-term unemployed and disabled. Projects like this do not only boost local economies but help to transform lives.
Listening and responding to local communities
Based on listening to what our customers and communities have been telling us, we are better able to serve more communities and understand what it takes to be a better neighbour. As a result of this listening, we are rolling out our plan to fit our local Express convenience stores with new shop fronts to blend in better with local neighbourhoods. To cut down local congestion and noise we are reducing the frequency of deliveries to our stores. We are also improving the way we consult with local communities before building new stores so that we can be sure that we understand fully local issues and concerns.
The planning system is complex, but new stores are opening
The planning system that supermarket operators have to navigate is complex and slow. It is currently under review for the Government by Kate Barker. However this complexity and delay in the system has not deterred new entry or materially limited competitive rivalry between supermarket operators.
Great choice - 94% of the population has access to three or more supermarket fascias over 3,000 sq ft within a 15 minute drive of their home – that’s great choice for the vast majority of people.
Many new openings - Hundreds of new stores have been opened by many operators over recent years. We note how Aldi, Lidl and Netto for instance have opened 307 new stores since 2000. Indeed in 70% of the areas where Tesco was said to have a share of more than 25% in 2000 have had three or more new competitors open since.
Our growth has been helped by the fact we have been proactive, more flexible and innovative, and risk embracing, as described below.
Developing a future pipeline of stores
At Tesco we understand that people do not like to see commercial property sitting empty or derelict. That is why we strive to keep our empty sites to an absolute minimum. It is better for our customers, better for local communities and better for business. This is also why we are calling on the Government to reform the planning process so that fewer sites stand empty.
To serve more customers and communities we need to acquire sites to build our stores. This is the only reason we buy land: to develop a new store or improve an existing store.
Over the years the process of acquiring the land, getting planning permission and building the store has become much more complex, risky and time consuming.
To acquire a single new site, especially in ‘brownfield’ or inner city regeneration areas, the process can stretch to years. This is because often we have to negotiate with dozens of separate landowners in order to assemble a complete site where we can build a single store.
The greater complexity in the planning regulations since the 1990s, involving extensive discussions with the planning authorities and other local stakeholders, means that, once we have the complete site, it now takes much longer to get planning permission.
The lead time to prepare a site for construction has increased as we move increasingly to brownfield and town centre sites.
The result of these changes means we need to buy more sites now than in the past simply to maintain the same rate of new store openings.
The process of opening new stores in the 1990s and present
Key facts at a glance
Job creation
Our Regeneration Partnerships have created almost 4,000 jobs, including 2,200 among the long-term unemployed and disabled.
New stores
The process of acquiring land, getting planning permission and building the store has become much more complex, risky and time consuming.
