Tesco has plans to close several poorly performing city centre Metro stores as it prepares to launch its new discount supermarket chain.
This move could see hundreds of jobs being axed, with an average Metro store employing around 75 people. Tesco told the employees of stores in Lancashire, Manchester and Liverpool of its plans to close the outlets, reported The Sunday Times .
Around 60 shops will be transformed into new Jack’s stores, which are named after Tesco’s founder Jack Cohen. This new format is designed to compete with major discounters LIDL and Aldi , which together hold around 13% of the UK grocery market.
Tesco’s Dave Lewis took over as CEO in 2014. Since then, he has introduced several Tesco-owned brands that are sold at discounted prices.
Supermarkets such as Tesco have been exploring ways to break into the discount grocery space after discounters such as Aldi and Lidl began attracting more shoppers following the recession.
Dave Lewis has also been launching plans to reduce costs and increase profit margins. Since 2014, the company has axed thousands of jobs, and has set a target of increasing margins from 2.9% in 2017 to between 3.5% and 4% by 2020.
The first Jack’s outlet will open in Chatteris, Cambridgeshire, which will sell brands such as Woodside, Willow and Redmere, reported The Guardian.
Tesco currently has close to 2,600 stores in the UK, which includes 172 Metro outlets.