Supermarket giant Tesco is to sell its Giraffe restaurant chain to Harry Ramsden’s owner Ranjit Singh Boparan as it continues to offload underperforming assets.
The disposal, along with the sale of Tesco’s Turkish operation to Swiss retailer Migros, represents a continued shift in strategy under chief executive Dave Lewis, who is attempting to turn the grocer around after years of decline under previous management.
Boparan, the boss of Fox’s Biscuits and Goodfella’s pizza owner 2 Sisters, will pick up 54 standalone Giraffe restaurants, three of which are within Tesco stores.
Tesco paid £48.6m for the Giraffe chain three years ago under a plan by previous boss Philip Clarke to turn its supermarkets into “retail destinations” akin to a shopping centres, with dining and relaxation at their core.
Backers of the restaurant business, founded by husband-and-wife team Russel and Juliette Joffe, included entrepreneur Luke Johnson, who made his first fortune with PizzaExpress, and venture capital group 3i.
The sale of Tesco’s Kipa business in Turkey to Migros will net the supermarket £30 million.
Lewis said: “As we stabilise the business in the UK, we continue to focus on where we can best serve the needs of our customers, while ensuring our business remains sustainable for the long term.
“The sale of Kipa reflects the particular strategic challenge we have faced in Turkey as a small regional player in a highly competitive market. It removes the need for the sustained investment required to enable the business to compete independently, allowing us to focus on improving profitability in Central Europe and continuing to grow our businesses in south-east Asia.”