Sportswear and equipment giant Sports Direct today emerged as the latest potential partner to help Tesco make its larger stores shopping destinations, as the retailer attempts to adapt to the shift to online shopping.
Sports Direct sources today confirmed to The Grocer it was in talks with Tesco; however, they denied reports that the stores would be based on the mezzanine floors but instead would be located only adjacent to Tesco stores.
“Sports Direct has some pretty big customers, some of whom are rivals to Tesco and who might not appreciate it actually being in the store,” said one source.
Tesco refused to confirm or deny rumours that the retailer, run by Mike Ashley, the owner of Newcastle football club, was poised to move into the mezzanine floors of at least three Tesco sites in the UK.
At the Tesco AGM today CEO Philip Clarke said it would continue to cut back on areas such as general merchandise in its stores, as part of a programme that will see some Extras reduced in capacity by up to a third.
He pinpointed the sports and leisure sectors as two areas it was looking at.
“It’s more than likely we will reduce the size of stores,” said Clarke, who said the “seismic shift” in shopping to online meant it had to completely rethink its capital strategy.
Tesco has already joined forces with companies such as Euphorium Bakery, invested in the Harris + Hoole coffee chain, and bought Giraffe restaurants, but is expected to unveil several other ventures.
It plans to add 1.26 million sq ft of shopping space in the UK this financial year, down from 1.31 million sq ft last year.
Tesco already has a similar joint venture in the Czech Republic, where an 80,000 sq ft store was cut to 50,000, with Sports Direct moving in to the remaining space.
Clarke told the AGM other potential plans for the retailer included selling or renting space to cinemas, while it has already opened a gym at a store in Sunderland.
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