Tesco considers launching ‘Finest’ stores

Tesco is considering launching upmarket convenience stores that would compete with brands such as Marks and Spencer's Simply Food, as it attempts to build on a recent recovery in sales growth and profit margins. Tesco suggested such stores could generate an estimated operating profit margin of 7 per cent - twice the level the company as a whole is making. A chain of Finest-branded stores would be a potential competitive threat to Marks and Spencer, which has 700 Simply Food stores. In recent months the company has slowed the rate of expansion of Simply Food outlets, preferring to open more larger food stores where its full product range can be sold. The Finest store concept was one of a range of initiatives outlined by Tesco as it seeks to accelerate its recovery from a damaging accounting scandal and slowing sales growth.

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