Tesco readies takeaway chain to compete with Pret and Eat

Tesco is readying a takeaway format that could see up to 80 outlets open in London as part of plans to expand the supermarket’s reach further into the lucrative lunchtime market.

tesco-foodtogo-2014-460
Tesco’s Food To Go concept in one of its larger stores. It is reportedly readying standalone versions that will open across London.

Steve Dresser, analyst at Grocery Insight, claims the move would see Tesco open a number of small outlets on high streets in the capital serving only ready-made food to go, such as sandwiches, soup and salads. Tesco declined to comment on the reports.

Tesco already offers services such as salad bars at locations including its Regent Street and Covent Garden stores. These are sold alongside a more traditional grocery range. However, it is understood the new formats would look much more like high street takeaway chains such as Eat, Greggs and Pret a Manger.

Expanding into both eat-in and takeaway food forms part of Tesco chief executive Philip Clarke’s turnaround plans. It has revamped its supermarkets to offer takeaway food areas and begun opening in-store restaurants through investments in restaurant chain Giraffe and New York-style diner Fred’s Food Construction, which recently opened at its Tesco Extra store in west London.

Tesco is not the first supermarket to launch a takeaway format, with Sainsbury’s trialling a “Fresh Kitchen” concept that offered a range of freshly prepared sandwiches, baguettes and hot food. However, it ended that trial in 2012 after admitting it wasn’t effective.

The reports come ahead of Tesco’s preliminary results, due on Wednesday, when analysts expect it to announce a further fall in like-for-like sales and profit. Clarke is under pressure to find new ways to mitigate the rise of the discounters and more upmarket stores and is looking at ways to diversify its core supermarket business and boost revenue.

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