No new Dobbies garden centres planned, reveals Tesco

Tesco has announced improved results but the only mention of its garden centre chain Dobbies, which is believed to be for sale, is that no new stores will be built in 2016/17.

The supermarket chain reported a £162m statutory pre-tax profit for the year to 27 February with UK like-for-like sales up 0.9 per cent in the fourth quarter. The results follow last year's £6.3bn loss, the worst results in its history.

This week, it was widely reported that Tesco would sell its non-core businesses, such as coffee shops, restaurants and garden centres. City analysts confirmed this was likely, with Wyevale Garden Centres owner Terra Firma most likely to be most interested. Sources has confirmed to HW that Wyevale has not moved from its position of wanting to buy the centres and increase numbers from 153 to 186, and turnover to above £400m before its ownership cycle ends around 2017-19.

A Tesco spokesperson said: "We don't have a comment on Dobbies. There is no mention of Dobbies in the report."

In the report, the only mention of Dobbies was that there are no new stores planned for 2016/17, after moving from 35-36 last year.

Tesco revealed its growth strategy, which was designed to "regain the trust" of customers. The group has introduced lower, more stable prices, redirected promotional and coupon spend into core shelf edge prices and reduced number of multi-buy promotions by a third in the fourth quarter.
The chain has also reviewed all its 33 food categories, reducing the number of products by 18 per cent, "lowering the price of an average weekly shop by over three per cent in the last year, while introducing 2,000 new lines".
Quinton Edwards director Simon Quinton Smith said: "This is a fantastic opportunity for the whole industry. I'm of the opinion there will be serious interest from various quarters which will possibly include Wyevale, Nicholas Marshall, James Barnes and others." He said other retail groups could be interested and that Dobbies was "the only national chain, with centres from Ashford to Inverness and in Northern Ireland".
Garden retail consultant Neville Stein said: "It's no surprise that Tesco are wanting to sell Dobbies as the chief executive, Dave Lewis seems to want to divest the company of their loss making enterprises, Dobbies being one of them. It will be interesting to see who makes a bid for the chain. If an existing garden centre operator purchases them then this will bring about further consolidation in the sector. On the other hand if a new entrant into  the sector bought Dobbies this might be good news for the sector - new entrants often have some fresh thinking and a new way of doing things. Lets hope that a new owner identifies loads of potential for garden retail and puts more effort into the plant category as this would be great for the nursery sector."
See more in Horticulture Week 15 April.

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