Tesco could pull the plug on Home Plus

Tesco is understood to be keen to give up leases it holds on 13 Home Plus stores following weak sales at the out-of-town stores. It has been reviewing the Home Plus stores for six months and two branches are already being marketed.

Tesco saw billions of pounds wiped from its shares earlier this month after it admitted that its £500m price cut campaign had failed to bring in customers.

Chief executive Philip Clarke has promised to lead a change in the company’s expansion strategy, with less focus on massive out-of-town stores.

Tesco first opened Home Plus stores at retail parks in 2005. They contain no food and sell only furniture and soft furnishings.

Tesco will face difficulties as the leases on the Home Plus stores are for 15 or 20 years with unfavourable terms.

If Tesco is unable to find new tenants, it is likely to leave the stores open.

Tesco reported a “disappointing” 2.3 per cent decline in like-for-like sales excluding VAT and petrol in the six weeks to January 7, which came in below its own expectations.

Tesco pledged to invest “hundreds of millions” in improving its quality and range and lowering prices.