Towards the beginning of the supermarket price war, when the Big Four were still consistently increasing market share and were less threatened by discounters, Tesco chose to invest in a minority stake in coffee shop chain Harris + Hoole.
While this appeared to be a good investment at the time, bosses have announced that six outlets will be closing in the coming months.
Harris + Hoole has at present around 40 branches in the south of England, with a number of these located as concessionary brands within Tesco stores.
Co-founder of Harris + Hoole, Nick Tolley, insists that these closures are not an indicator of overall business performance.
He says; “Harris + Hoole is a fast growing business.
“We have six more stores scheduled to open this year and the vast majority of our stores continue to perform strongly.
“However, like any business which has grown rapidly, some locations have performed better than others, so it makes sense for us to review those locations which have done less well, or where the lease is coming to an end.”
Harris + Hoole attracted a relatively high amount of negative publicity due to its relationship with Tesco as critics claimed the independent business was “selling out” in order to gain a higher profile.
Similarly, the move was seen by many as Tesco’s attempt to capitalise on other markets at a time where it should really have been focusing on its own affairs – Tesco’s US subsidiary Fresh and Easy, for example, was haemorrhaging finances at that point.
In part, the relationship with Harris + Hoole could be seen by some as a contributing factor in the departure of chief executive Philip Clarke, who will leave his position at Tesco on the 1st of October. He will be replaced by Dave Lewis.
At this point it is uncertain whether Mr Lewis will decide to continue to open Harris + Hoole coffee shops within Tesco’s larger stores in the long term, especially as the trend within the grocery industry is very much leaning towards convenience stores. However, Mr Tolley claims that the two businesses will continue to work together.
He concludes; “This review of our business was led by Harris + Hoole and we continue to have the full support of Tesco.
“It’s clear that our customers love the coffee, service and experience we offer, and this will be the bedrock of our future performance.
“Our working relationship with Tesco remains strong and we are looking forward to upcoming openings within Tesco stores later this year, as well as our planned standalone openings.”