Britain’s biggest retailer Tesco is cancelling plans to open five new stores in the region and will close a further 43 stores nationwide as it struggles to cope with increasing competition from discounters and other rivals.
Plans to open 49 new “very large” stores have been scrapped, including sites in Stonebridge Mills in Leeds, Stocksbridge in Sheffield and Immingham.
Included in the 49 cancellations are two replacement stores that will no longer open in Huddersfield and Driffield. Instead the existing, smaller stores in the two towns will stay open.
New chief executive Dave Lewis said: “It is with a heavy heart that I am announcing that we are unable to proceed with 49 planned new store developments across the UK.
“Our performance as a business has fallen significantly short of where we would want it to be and my absolute imperative has to be to protect the future of our business for the 300,000 colleagues we employ in communities all over the UK.
“I know that this news will be a real disappointment to many people in the local community.”
Tesco is not disclosing the location of the 43 unprofitable stores that will be closed down, but said a significant proportion will be loss-making Tesco Express convenience shops.
The group also said it will also abandon its headquarters in Cheshunt in 2016 after more than 40 years.
In addition, staff will be hit by the closure of the group’s final salary pension scheme.
Tesco’s shares rose 15 per cent to close at 209p, despite a final dividend for the year being cancelled, as investors viewed the radical cost cuts as the right step forward as the company tries to recover from a £263m accounting black hole and four profit warnings.
There was also cheer at the news that like-for-like sales over the six weeks to January 3 fell by just 0.3 per cent. This was a marked improvement on earlier declines and much better than City forecasts. Tesco also said it will sell its broadband business and its UK download brand Blinkbox to TalkTalk.
The group has named turnaround specialist Matt Davies, currently boss of Halfords, to lead its UK and Ireland business from June.