The supermarket bought the business in a £48.6 million deal announced this morning (13 March). Giraffe has 47 restaurants across the UK and the next restaurant to be opened “near” a Tesco store will be “near London”.
Tesco will look to fill some of the space in its larger supermarkets with the restaurants as part of chief executive Philip Clarke’s bid to make stores “warmer and less clinical”.
Kevin Grace, Tesco group commercial director, says: “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 is understood Giraffe’s founders Russell and Juliette Joffe will remain in the management team, but have sold their combined 54 per cent stake in the business.
Russel Joffe 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. It will be very much business as usual at Giraffe.”
The move comes shortly after Tesco acquired a 49 per cent stake in coffee house Harris+Hoole, much to the dismay of some of its customers who thought the chain was independently owned.
The supermarket also recently invested an undisclosed amount in bakery chain Euphorium as it looks to leisure businesses to provide additional revenue streams for the company, which suffered a torrid 2012 where it lost market share to rivals and reported flagging sales – although it has shown recent signs of stability. Last month it warned the horse meat scandal will hit profit margins, with DNA tests on the meat it sells costing the company up to £2m a year.
This week Tesco introduced a new price promise, backed by a significant marketing campaign, offering customers buying 10 items or more money-off coupons on their till receipts worth up to £10 if they could have bought their items for less at a rival supermarket.