LONDON: Tesco has confirmed it has scrapped plans to build 49 new larger supermarkets as it announced it would slash its capital expenditure budget by half to 1 billion pounds in 2015/16.
The 49 sites are located across the country and amount to 1.8m square fit of planned space that will no longer be built out. Tesco today announced its capital expenditure budget in 2015/16 would be slashed by half to £1bn in 2015/16.
Tesco announced it would slow the roll out of its store refurbishment programme as it cut capital expenditure by 400 million pounds to 2.1 billion pounds in the 2014 financial year.
Dave Lewis, Tesco chief executive said some of the plans had been around for a very long time because it takes time to build up parcels of land for larger stores, but that it was not very sensible to build out the stores.
He said Tesco had written to the communities involved to inform them that the planned stores would no longer be built.
Further it said there would be a significant revision to Tesco’s store building programme to strengthen the balance sheet, and it will also close 43 existing stores that are unprofitable.
Alan Stewart, Tesco chief financial officer said 1 billion pounds was the right level of cap ex and that he did not believe the business is going to suffer as a result of the cut.
