Archive This article is from our archive and might not display correctly. Download PDF
The supermarket giant, Tesco, has ventured into the restaurant industry with the acquisition of the food chain, Giraffe, for a reported £49 million with the original founders selling their 54% stake. The buy out comes as an attempt to counter the rising number of customers shopping online; with Morrisons announcing that they will be selling food online from January 2014.
Giraffe have a good customer base and are relatively well established in the UK. The family friendly eatery was founded in 1998 and currently has 48 locations in the UK and one international spot in Dubai.
Buying the chain of restaurants comes as no surprise to commentators who say that the acquisition signals a distinct signal by Tesco to make their stores more family friendly with the inclusion of a restaurant. Sainsbury's have already attempted this by housing the US based coffee chain Starbucks. The buy out, highlights Tesco's intent to not only improve there profits, but to also venture into the different markets. This can only be seen as an attempt to provide a complete and enhanced shopping experience where you can go for coffee, meet friends, as well as do your weekly shop. The ultimate goal, it seems, is to improve and redirect the Tesco brand.
Tesco also recently bought a stake in the small coffee company Harris + Hoole, who are predominately located in London, as well acquiring a stake in the London based Bakery, Euphorium. These two brands, along with Giraffe, have a distinct attraction to them. Their sleek designs, modern layouts and fresh branding attract both their customers and Tesco management. Tesco also own blinkbox, an online site where you can stream the latest films and TV programs.
Kevin Grace, Tesco's Commercial Director, has suggested that introducing the Giraffe restaurants in store will allow for a "warmer and less clinical" experience, especially in branches where business has been below the targeted level. The idea of bringing restaurants, cafes and bakerys to Tesco, according to Grace, has been inspired by the Westfield shopping malls that have large, open and well designed spaces for customers to eat, drink, and socialize.
The purchase of Giraffe, Harris + Hoole, Euphorium, and the launch of blinkbox provides a shift to the types of supermarkets that are experienced in Asia and the US, where it isn't unusual to go shopping and grab some food in the same place. Grace also stressed that it was also the plan to build new Giraffe restaurants close to, not necessarily inside Tesco stores, where possible.
Tesco plans to have their first supermarket with a Giraffe restaurant, by the end of 2014.