Tesco planning to axe dozens of city centre stores

Tesco is planning to close dozens of stores as it prepares to launch its new chain of discount supermarkets, according to reports.

Up to 30 poorly performing city centre Metro stores will be axed and a further 60 shops converted to Jack’s stores, putting thousands of jobs at risk, the Sunday Times says.

Staff at Metro outlets in parts of Lancashire as well as in Manchester and Liverpool have already been informed that their stores will be closing, the newspaper reports.

The new stores, named after Tesco founder Jack Cohen, will seek to rival Lidl and Aldi, which currently occupy more than 13% of the UK grocery market.

“Tesco chief executive Dave Lewis is cutting costs to boost profit margins,” the Times says. He has set a target of 3.5% to 4% by 2020, up from 2.9% last year, and slashed thousands of jobs since joining the company in 2014, it adds.

The retail giant is preparing to unveil the first of the Jack’s stores on Wednesday in the market town of Chatteris in Cambridgeshire.

The “closely watched venture is one of the most significant moves by a mainstream UK supermarket chain in recent years, and points to Tesco moving on from the 2014 accounting crisis that brought it to its knees,” The Observer says.

But analysts warn the move could be a sign that Tesco is losing faith in its identity.

“With its fictitious brands, new discount fascia and a retreat from the high street, Tesco is beginning to look like it has lost confidence in its core brand,” one analyst told The Times.