Tesco Buys Giraffe Restaurant Chain

Posted on 16 March, 2013 by Kirsten Kennedy

Tesco has attempted to diversify its business and take a step ahead of rivals this week by purchasing restaurant chain Giraffe. The deal, worth £48.6 million, will see the supermarket acquire Giraffe’s 48 UK outlets with the opportunity to open further branches nationwide.

Industry experts believe that Tesco plans to open new restaurants near to existing supermarket as a means of creating “retail destinations”. This could be especially relevant for families with young children as Giraffe is a popular choice when looking for a family friendly eatery.

Tesco’s commercial director Kevin Grace believes that consumers will “love it”, while managing director of Conlumino Neil Saunders claims that the group has made a very clever move in expanding its horizons.

He says; “I think it’s a very significant move.

“Traditional retailing is seeing much more sluggish growth and one of the things that all retailers have got to do is look to wider areas of spending including leisure and dining out.

“This exposes Tesco to much more lucrative growth.”

Of course, this is not the first time Tesco has dabbled in areas outside the field of traditional retailing, as it has recently invested in a number of businesses in booming sectors. It already owns a 49 per cent stake in the Harris and Hoole coffee shop chain, and has invested a significant sum in Euphorium Bakery.

With the acquisition of the Giraffe chain, it appears that Tesco has been dealt a winning hand. The business is going from strength to strength thanks to the wide range of consumers it appeals to, and founders Andrew Jacob and Russel and Juliette Joffe have agreed to remain involved with places on the management team. Mr Joffe will also continue in his role as managing director.

He says; “This move will allow us to introduce Giraffe to a wider audience, presents great opportunities for growth and for the team to be involved in an exciting stage in our brand’s development.”

Do you think supermarkets will be forced to diversify in this manner if they wish to remain profitable, or would channelling investments into lower prices and quality products be a wiser business move?



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