It’s not very often that you hear a leading retailer – let alone one like Tesco – announce a policy of “active withdrawal”, but that is the phrase CEO Philip Clarke used today as he told of the impact of digital on its future store plans.

Having told the equivalent press conference in last year’s half-year results that Tesco was “back on the front foot”, it is becoming apparent that even the mightiest UK retailer is at the centre of an unprecedented shift in consumer spending patterns. It’s a shift that is making retreat the only sensible course of action across large sections of its business.

Tesco’s fall in like-for-like UK sales may have disappointed the City but it is surely the issue of whether it can adapt its stores – and its digital operation – to this new reality that is the bigger concern.

As it turns out, food sales have held up quite well considering the continuing economic situation, the strength of competition from discount rivals, and Tesco’s unfortunate star billing in the horsemeat scandal.

Frozen food was, as expected, the worst hit, but Clarke claims things are already picking up.

However, with entire sectors such as household electronics plunging off the cliff, the same cannot be said of non-food.

Clarke gave a fascinating picture of the store of the future, speaking of a recent visit to the new Gateshead store, which had its footprint slashed by a fifth because Tesco realised it risked carrying several thousands of square feet of useless space.

The same is likely to be true of all of the larger stores it is set to build, while hundreds will not go ahead at all.

But will the new layouts Tesco has planned prove more resistant to the exodus to online? Putting bigger restaurants in store (whether they are Giraffes or not) will not save Tesco’s big sheds from becoming white elephants if the march to the web starts to consume areas such as health and beauty, clothes and – whisper it – food, particularly as new online models emerge.

If Tesco can succeed in making its slimmed-down hypermarkets retail destinations, Clarke will be proved right when he claims the company knows its fate is in its own hands. There’s yet another sobering thought: if Tesco has not yet found a way to compete with the rise of online, what hope is there for the rest?

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