Tesco’s three-year dalliance with the UK casual dining sector has come to an abrupt end after it agreed to sell off the Giraffe restaurant chain.
The supermarket giant paid almost £50m for the business in 2013 as part of a strategy to create ‘retail destinations’ for shoppers and utilise space at its larger outlets.
But speculation grew in April this year that new Tesco chief Dave Lewis, who took over in the wake of an accounting scandal, was looking to offload Giraffe to focus on rebuilding its core UK supermarket business instead.
The Giraffe business will now be operated by Boparan Restaurants Holdings Limited, which already owns Harry Ramsden’s and Fishworks and pledged earlier this year to build a multi-site foodservice operation.
It is not clear how much it has paid for the chain, but the deal includes 54 standalone restaurants, of which 12 are franchise sites, and three restaurants within Tesco stores.
Tesco’s Dave Lewis said that Giraffe didn’t fit into its future growth strategy. “As we stabilise the business in the UK, we continue to focus on where we can best serve the needs of our customers, while ensuring our business remains sustainable for the long-term,” he said.
“Giraffe is a much loved brand, and while casual dining remains an important part of the shopping trip for many of our customers, we will continue to meet these needs through our Tesco Cafés and other providers. I’d like to thank colleagues from Giraffe for all their hard work in serving our customers and we look forward to seeing it develop in the future.”
Earlier this year, Sky News reported that Giraffe had lost money in recent years, partly as a result of the cost of opening new sites. Accounts filed at Companies House show that the restaurant chain lost more than £4m in the 53 weeks to March 1, 2015.
At the time of the acquisition three years ago, Tesco said that Giraffe was an example of a business that added value to its business.
“We have the opportunity to develop some of the space in our larger stores to create retail destinations that offer customers even more choice. Giraffe is hugely popular with a wide range of ages and particularly families – we think our customers will love it,” it said.