Tesco has agreed to sell its Euphorium bakery business to two buyers in the latest stage of its drive to simplify the way it operates, according to press reports. The move comes just a year after Tesco took full ownership of Euphorium.
Bringing bakery back in-house
The deal will see Tesco take back ownership of its 57 in-store bakery concessions and smaller units located inside Express stores. Four high street stores and Euphorium's Islington factory will be sold to Soho Coffee Co. which operates from almost 30 locations in the UK and at popular international airports. These standalone stores will continue to operate using the Euphorium name. Euphorium's Weybridge plant has been bought by Samworth Brothers, a specialist in premium quality chilled and ambient foods, and a long term supplier partner of Tesco.
Heroing bakery in-store
The changes come as Tesco begins piloting a new bakery format in a number of its stores, including Millbrook Extra in Southampton and Maldon, Essex. In these stores customers can see right into the bakery production area, with dark tiled fixtures and tasting tables giving the area a more premium look than Tesco's Bakery Project fixture (which was created by Euphorium founder Daniel Bear). Regaining ownership of the Euphorium concessions will enable Tesco to roll the new style fixture more widely and ensure that it can introduce improvements to its bakery offer throughout its estate. The need to do this is made more urgent by competitors raising standards in bakery. The quality of in-store baked products has become a key reason for visiting Aldi and Lidl, Sainsbury's has completed an upgrade to the quality of its in-store baked offer and Morrisons is also emphasising its in-store baked offer more through "Morrisons Makes It" badged products.
Latest disposal of non-core business
Offloading Euphorium demonstrates Tesco's drive to follow through on its promise to restore its focus on core businesses and follows the recent disposals of Giraffe restaurants, Harris + Hoole, Nutricentre and Dobbies Garden Centres. Commenting on the sale a Tesco spokesperson said “We know how important a great bakery offer is to our customers, and this agreement will mean we can continue to serve shoppers with great quality Tesco bakery products.”
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