Furious customers threaten to boycott Tesco as it closes food counters and hot delis – and experts warn the supermarket giant is ‘underestimating’ Lidl and Aldi and ‘making a mistake which could cost billions’
- Tesco’s remaining counters and hot delis will close for good on February 26
- But some customers are saying they no longer have an incentive to use its stores
Furious shoppers are threatening to boycott Tesco after the supermarket giant announced today that it will close its food counters and hot delis.
Experts have also warned Tesco, the UK’s largest supermarket, that it is making a ‘mistake’ by scrapping the services and say it is underestimating discount retailers such as Aldi.
Tesco’s remaining food counters and hot delis will close for good on February 26, with the supermarket having earlier removed them from the majority of stores.
The chain has also announced that it will be making a number of changes to store management roles and closing a number of in-shop pharmacies as part of the wide-ranging overhaul. The shake-up is expected to impact around 2,100 jobs.
Analysts have also warned Tesco, the UK’s largest supermarket, that it is making a ‘mistake’ by scrapping the services
Customers have reacted with anger to the move, though, with many saying they no longer have an incentive to use its stores.
Taking to social media, one shopper said: ‘There really isn’t much incentive to shop at Tesco anymore. Closing ALL your hot food counters, and others for deli, fish, meat.. and axing 2100 jobs while you’re at it?
‘The quality at Tesco isn’t even good. Sainsburys, Asda, Morrisons, all better stores..
‘Basically lost all reason to go during work for lunch. Guess its back to Lidl!’
Another said: ‘Disappointed to see Tesco are closing their fresh fish, meat, deli & hot counters.
‘Especially as they made £2.9bn profit last year. I used them pretty often, for things like rolled belly pork, mussels etc. Guess I’ll be going to Waitrose more often then.’
A third customer tweeted: ‘Don’t shop at Tesco, they are now also removing their hot deli counters, they are going to stop us eating the food we want and like.’
It comes as Richard Hyman, a retail analyst and partner at Thought Provoking Consultancy, today suggested that major supermarkets could be pushing away loyal customers by removing in-store services that shoppers enjoy.
He said: ‘I think it is a strategic mistake to diminish and reduce service levels in major supermarkets because it is the key thing that differentiates them from the discounted supermarkets.
‘The majority of households still prefer to shop at the major supermarkets because of reasons to do with greater choice and greater service.
Jason Tarry, Tesco UK and Ireland chief executive officer, said the retailer will ‘support those colleagues impacted and help find alternative roles within our business’
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‘So, if you are going to play around with those service levels, then you need to be really careful that you’re getting the balance right, and I’m not 100 per cent certain that they are.’
Mr Hyman said the value that supermarkets such as Aldi and Lidl now have has rapidly increased their share of the market and have already taken billions of pounds worth of sales from the ‘major players’ Tesco and Sainsbury’s.
He added: ‘Major players and the City have consistently undervalued the value players, who are extraordinarily good at what they do.
‘They really thought that their customers would never be caught dead in one of those shops.
‘But making that wrong judgment has cost them billions and billions of pounds, and I think they still underestimate them.’
But Tesco has said it has seen a significant fall in demand for its food counters over the last few years and its customers ‘no longer say they are a significant reason for them to come in store and shop with us’.
Meanwhile, the number of lead and team managers in Tesco’s large shops is being reduced as part of changes to its management structure – impacting around 1,750 employees.
The move will also introduce around 1,800 new shift leader roles in stores, running operational duties on the shop floor.
A further 350 workers are expected to be affected by a series of localised changes, such as the closure of eight pharmacies and reduced hours at some in-store post offices.
Tesco will also cut a ‘small number’ of different head officer roles and will close the Tesco Maintenance National Operating Centre in Milton Keynes.
The retailer says all all affected workers will be offered alternative roles, although it did not say how many staff work on counters and delis.
the number of lead and team managers in Tesco’s large stores is being reduced as part of changes to its management structure
Jason Tarry, Tesco UK and Ireland chief executive officer, added: ‘These are difficult decisions to make, but they are necessary to ensure we remain focused on delivering value for our customers wherever we can, as well as ensuring our store offer reflects what our customers value the most.
‘Our priority is to support those colleagues impacted and help find alternative roles within our business from the vacancies and newly created roles we have available.’
Daniel Adams, national officer of the Usdaw union, said: ‘Tesco has informed us that they are looking to undertake restructures across the business.
‘Clearly there is no good time to receive news like this, but it is especially difficult in the midst of a cost-of-living crisis and will be devastating for those who may be affected.
‘Usdaw will be entering into collective consultation with Tesco immediately to interrogate these proposals.
‘We will be doing all we can to support members throughout the process with a view to protecting jobs and, where this is not possible, securing the best possible deal for those affected.’
It comes after Sainsbury’s made the decision to close all its meat, fish and deli counters in 2020, before last year shutting down its 200 in-store cafes.
Aldi and Lidl now have has rapidly increased their share of the market and have already taken billions of pounds worth of sales from the ‘major players’ Tesco and Sainsbury’s, Mr Hyman said
Earlier this month, LloydsPharmacy said it will be closing its 237 pharmacy sites within Sainsbury’s supermarkets.
Richard Lim, chief executive of consultancy Retail Economics, said supermarkets have become ‘laser-focused’ on profitability in the face of inflation and squeezed consumer budgets.
He added: ‘Over the last decade, the squeeze on profitability has been immense and grocery retailers have to deal with so many headwinds – more recently, the cost-of-living impact on consumers and rising operating costs.
‘At the same time, they are having to pay more on energy bills, logistic, transport and warehouse costs are going up, and they are dealing with the rise of the discounters, who are aggressively increasing their market share.
‘They are, therefore, really focusing on the core business being food and having this real, laser-like focus on profitability and trying to strip out the inefficient and unprofitable parts of the business, like the hot delis.’
Mr Lim also suggested that higher-end retailers like Waitrose and Marks & Spencer will be able to fall back on their quality offering to a degree, something which makes them stand out from competitors.
Middle-class consumers making cutbacks by ditching meals out and enjoying dining in instead could be beneficial for such retailers, he said.
However, Mr Hyman warned that it will continue to be a tough environment for supermarkets and the wider retail sector as consumers grapple with squeezed budgets and rising costs.
It comes as grocery price inflation hit a record 16.7 per cent in the four weeks to January 22, according to figures from analysts Kantar.
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