Tesco could build a warehouse to distribute its Cherokee and Florence & Fred clothing ranges to internet shoppers.
The retailer is also looking for locations to test stores selling only its home and fashion ranges. It plans to open another 20 of its larger format Extra stores this year and 60 convenience stores. The company is trying to add extra floor space to existing outlets.
Lex, in the Financial Times, says Tesco invested £2.7bn last year, including acquisitions, compared with depreciation of £800m although much of that was in freehold land, which is not written off.
The company has raised its return on capital employed from 10.2% to 11.5% in two years through profit growth, working capital improvements and property sale and leasebacks. Tesco has 1,250 UK stores.
The Daily Telegraph, which looks at the backlash from consumers worried that small shops are being squeezed out by Tesco’s growth, asks if the multiple is getting too big for its own good.
References: Financial Times 13/04/05 page 20 (Lex), page 21, page 22 (Lombard, main), The Guardian 13/04/05 page 2, page 18, page 19 (Notebook), The Times 13/04/05 page 8-9, page 40, The Daily Telegraph 13/04/05
